Essar Group, which has investments in the energy, infrastructure, technology, metals and mining, and related industries, announces the establishment of Essar Energy Transition (“EET”) to promote the development of the UK’s premier energy transition centre in North West England.
For the next five years, EET expects to invest a total of US$3.6 billion in the development of various low-carbon energy transition projects, of which US$2.4 billion will be spent on its Stanlow facility, located halfway between Liverpool and Manchester, and US$1.2 billion in India.
The investment program of EET will be crucial in expediting the UK’s transition to a low-carbon economy, promoting the government’s decarbonization strategy, and generating opportunities for highly trained workers at the center of the Northern Powerhouse industry.
The investments will help North West England fast become one of the top post-carbon industrial clusters in Europe. They span a variety of hydrogen production technologies, decarbonization, biofuels (road and aviation), and infrastructure projects. According to EET, these investments will help reduce carbon dioxide emissions by about 3.5 million tonnes, or almost 20% of all industrial emissions in North West England.
Essar’s repositioning for development and revival is signaled by the introduction of EET. Essar is now investing in brand-new, long-lasting assets with modern, effective, and ESG-compliant technology. Beyond EET, the Essar Group also plans to invest in sustainability through the establishment of an LNG value chain in India, which will include LNG truck manufacturing and LNG fuel stations, a pellet plant in the eastern Indian state of Odisha, and a 4-million-ton-per-year green steel complex in Ras-Al-Khair, Saudi Arabia.
The basis of EET’s strategy is the notion that biofuels and hydrogen are quickly becoming internationally relevant fuels of the future, and that the UK is well-positioned to lead the market’s explosive expansion in Europe for low-carbon fuels. The UK already has a highly developed legal and policy framework to encourage the production of low-carbon energy, including the government’s goal of producing 10 GW of hydrogen by 2030, in addition to creating low-carbon infrastructure, expertise, and a sizable customer demand. By the end of the decade, EET predicts that about two thirds of its total cash flows might come from a variety of low-carbon sources due to the size of the market growth opportunity.
After the UK government’s choice of HyNet as one of only two hydrogen clusters in the nation to potentially be supported through to full operations in 2021, Essar’s Stanlow site already occupies a key position in the UK’s energy transition planning framework.
As part of EET’s decarbonization goals, the Stanlow refinery will also reduce its carbon emissions by 75% until the end of this decade, making it one of Europe’s most environmentally friendly refineries and a crucial supplier of fuel to the UK.
EET will invest US$1.2 billion in creating a cost-effective global supply hub for low carbon fuels in India, including green hydrogen and green ammonia, in addition to the US$2.4 billion it will invest in the UK. In order to provide the growing market need for green hydrogen, ammonia will be exported from India to the UK, Europe, and other countries.
The investment made by EET in India will assist in achieving the nation’s burgeoning hydrogen ambition. The National Green Hydrogen Mission, announced by the Indian government on January 4, 2023, outlines how the country would become a leading global hub for the production and export of green hydrogen with the aid of a supporting regulatory environment.