Essar Energy Transition To Invest $3.6 Billion In Green Business In The U.K., India

The green vertical part of the Essar Group's Energy arm will develop low-carbon energy transition projects over the next 5 years

<div class="paragraphs"><p>Essar Group's Stanlow Refinery Complex (Source: Essar)</p></div>
Essar Group's Stanlow Refinery Complex (Source: Essar)

Essar Group has created Essar Energy Transition, a green vertical, to drive $3.6 billion in investments in green energy hubs in the U.K. and India.

The green vertical part of the Essar Group's Energy arm will develop low-carbon energy transition projects over the next five years with $2.4 billion in investments in the UK—across its site at Stanlow Refinery and between Liverpool and Manchester, the company said in a statement.

Around $1.2 billion will be invested in India, it said.

Essar Energy Transition will include:

  • Essar Oil UK, the company’s refining and marketing business in Northwest England

  • Vertex Hydrogen, which is developing 1 GW of blue hydrogen for the U.K. market, with a follow-on capacity set to reach 3.8 GW

  • EET Future Energy, which is developing 1 GW of green ammonia in India, is targeting the UK and international markets.

  • Stanlow Terminals Ltd. is developing the storage and pipeline infrastructure

  • EET Biofuels is investing in developing 1 metric ton of low-carbon biofuels.

EET’s investment programme will play a major role in accelerating the U.K.'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 the range of hydrogen production technologies, decarbonisation, biofuels (road and aviation), and infrastructure projects, will contribute to Northwest England quickly becoming one of the leading post-carbon industrial clusters in Europe, the company said.

UK 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 around two- thirds of its aggregate cash flows could come from diversified low carbon sources before the end of the decade.

The 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, it said.

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 that will last for several decades.

"We are excited about the opportunity to drive the UK’s energy transition by producing low-carbon future fuels that will help eliminate around 20% of the industrial carbon dioxide in Northwest England," Prashant Ruia, director of Essar Capital, said. "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."

"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," said Tony Fountain, managing partner of Essar Energy Transition.

Some of the other green 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 building a 4-million-tonne per annum green steel complex at Ras-Al-Khair, Saudi Arabia, the company said.

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 UK government's selection of HyNet in 2021 as one of only two hydrogen clusters in the country to potentially be supported through 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 important fuel supplier to the UK one of the most sustainable refineries in Europe.