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[London, 27 February 2023]: Essar Group, invested in Energy, Metals and Mining, Infrastructure and Technology sectors, today announces the formation of Essar Energy Transition (“EET”) to drive the creation of the UK’s leading energy transition hub in North West England.
EET plans to invest a total of US$3.6 billion in developing a range of low carbon energy transition projects over the next five years, of which US$2.4 billion will be invested across its site at Stanlow, between Liverpool and Manchester and US$1.2 billion in India.
EET will include:
EET’s investment programme will play a major role in accelerating the UK’s low carbon transformation, supporting the government’s decarbonisation policy and creating highly skilled employment opportunities at the heart of the Northern Powerhouse economy.
The investments, across a range of hydrogen production technologies, decarbonisation, biofuels (road and aviation), and infrastructure projects, will contribute to North West England quickly becoming one of the leading post-carbon industrial clusters in Europe. EET believes that these investments will support the reduction of around 3.5 million tonnes of carbon dioxide, around 20% of the total industrial emissions in North West England.
The launch of EET heralds Essar’s repositioning for growth and resurgence. Essar is now investing in new forward-looking assets with modern, efficient, and ESG-compliant technologies to last for several decades. Other sustainability investments planned by the Essar Group beyond EET include the creation of an LNG value chain in India, including LNG truck manufacturing and LNG fuel stations, setting up a pellet plant in Odisha, in eastern India and a 4-million tonnes per annum green steel complex at Ras-Al-Khair, Saudi Arabia.
EET’s strategy is founded on the fact that hydrogen and biofuels are fast becoming globally significant fuels of the future and that the UK is positioned strongly to spearhead the rapid growth of the European low carbon fuels market. The UK already benefits from an advanced regulatory and policy framework to support low carbon energy production, including the UK government’s target of achieving 10GW of hydrogen production by 2030, alongside developing low carbon hydrogen infrastructure, expertise and significant customer demand. Such is the scale of the market growth opportunity that EET estimates approximately two-thirds of its aggregate cash flows could come from diversified low carbon sources before the end of the decade.
As a core part of the HyNet cluster, Essar’s Stanlow site already plays a prominent role in the UK’s energy transition planning framework, following the selection of HyNet by the UK government in 2021 as one of only two hydrogen clusters in the country to potentially be supported through to full operations.
The Stanlow refinery itself will also achieve a 75% reduction in carbon emissions before the end of this decade as part of EET’s decarbonisation plans, making this strategically critical fuel supplier to the UK one of the most sustainable refineries in Europe.
In addition to the US$2.4 billion investment in the UK, EET will also invest US$1.2 billion in developing a cost-efficient global supply hub for low carbon fuels in India, including green hydrogen and green ammonia. Ammonia will be shipped from India to the UK, Europe and globally to meet expanding market demand for green hydrogen.
EET’s investment in India will help deliver on the country’s emerging hydrogen ambition. The Indian government’s supportive regulatory framework is designed to help position the country as a leading global hub of green hydrogen production and exports, as set out in its National Green Hydrogen Mission, approved by the Indian government on 4 January 2023.
Prashant Ruia, Director, Essar Capital, said:
“The launch of EET is a major milestone in Essar’s long-standing commitment to put the UK at the forefront of low carbon energy. We are excited about the opportunity to drive the UK’s energy transition by producing low carbon future fuels which will help eliminate around 20% of the industrial carbon dioxide in Northwest England. In doing so, it will provide a blueprint for how traditional industries globally can be successfully transformed into hubs for the production of future energies.
Tony Fountain, Managing Partner of Essar Energy Transition, said:
“EET’s ambitious investment plans will not only help deliver the UK’s net zero ambitions and the enormous environmental benefits therein, but will also secure the long term sustainable future for Stanlow, protecting and creating new highly skilled job opportunities at the heart of the Northern Powerhouse economy for generations to come.”