Essar Group is set to transform the UK’s Stanlow refinery into the world’s first decarbonised green refinery by incorporating blue hydrogen for its heating and power requirements, effectively reducing carbon emissions by up to 95%, a senior official stated on Tuesday. Prashant Ruia, director of Essar Capital, which manages the group’s investment portfolio, spoke at the Financial Times’ Energy Transition Summit India, where he discussed the company’s ambitious plans to decarbonise its operations.
The decarbonisation of the Stanlow refinery will be driven by Essar Energy Transition’s (EET) HyNet project. In the first phase, the project will produce 350 megawatts of blue hydrogen, scaling up to 1 gigawatt in the second phase. Since the UK lacks sufficient solar and wind capacity to generate renewable electricity that could power electrolysis for green hydrogen production, EET has turned to blue hydrogen. This hydrogen is produced using natural gas, and the carbon emissions generated in the process are captured and permanently stored.
Ruia highlighted the significance of this project, stating, “We are working to make Stanlow the world’s first fully decarbonised green refinery. By decarbonising 95% of our carbon dioxide emissions, we can significantly reduce the environmental impact of refining crude oil into fuels like petrol and diesel.” By employing blue hydrogen, the refinery will prevent up to 2.5 million tonnes of CO2 emissions annually, equivalent to taking 1.1 million cars off the road.
The use of hydrogen for the refinery’s heating and power needs is a global first, Ruia emphasized. Last week, the UK government announced a £21.7 billion investment over 25 years to support the creation of two carbon capture clusters in northern England, which include large blue hydrogen projects. The HyNet hub in Merseyside, alongside the East Coast Cluster hubs in Teesside, will collectively capture and store over 8.5 million tonnes of CO2 annually in reservoirs beneath the Irish Sea and North Sea.
Decarbonising the refinery will not only reduce emissions but also improve the refinery’s profitability by eliminating carbon tax obligations. Beyond its efforts in the UK, Essar is pursuing various global decarbonisation initiatives. The company, which became debt-free in 2022, is planning to construct a green steel plant in Saudi Arabia and create an LNG and electric ecosystem aimed at decarbonising long-haul heavy trucks.
In India, Essar Future Energy, a subsidiary of EET, is set to develop 1 gigawatt of hydrogen production capacity in Jamnagar, Gujarat, along with an associated green molecules capacity of 1 million tonnes per annum over the next four years. As part of its focus on green mobility solutions, Essar is expanding its fleet of LNG-powered trucks to support sustainable transportation. Currently, Essar operates 500 LNG-powered trucks and aims to increase this number to 20,000-30,000 in the coming years.
Ruia noted that trucks are among the largest polluters on the roads, each emitting around 110 tonnes of CO2 annually. India has about 4 million trucks, responsible for nearly 18% of the country’s carbon emissions. LNG-powered trucks can reduce CO2 emissions by 30-35% compared to diesel, while also eliminating nitrogen oxides and sulfur oxides, which contribute to air pollution and acid rain. Essar is also expanding its fleet of electric trucks, which have zero emissions, and developing a retail network to supply LNG to trucks.
Essar’s vision includes a diversified approach to green transport, with LNG trucks covering long distances of up to 1,400 kilometers and electric trucks designed for shorter routes with a range of around 150 kilometers. These efforts are part of the group’s broader plan to invest $3.6 billion in decarbonising the Stanlow refinery and an additional $4 billion to establish a hydrogen-powered green steel plant in Saudi Arabia.
Essar Group is a diversified global conglomerate with operations in sectors such as energy, metals and mining, infrastructure, and technology. Founded in 1969, Essar is focused on driving sustainable growth through innovation and environmental responsibility. The group has a presence in over 20 countries, with significant investments in decarbonisation, green energy, and advanced industrial solutions.
