Essar Group has created a new entity called Essar Energy Transition (EET) with plans to invest US$3.6 billion over the next five years in various low-carbon energy transition projects, including US$2.4 billion in West England and US$1.2 billion in India.
EET includes multiple business entities under the Essar Group:
- Essar Oil UK is part of EET and is a refining and marketing business located in North West England.
- Vertex Hydrogen is also part of EET and is developing 1 gigawatt (GW) of blue hydrogen for the UK market, with plans to expand to 3.8 GW.
- EET Future Energy is another entity under EET and is developing 1 GW of green ammonia in India to target UK and international markets.
- Stanlow Terminals Ltd is developing storage and pipeline infrastructure to enable the transition to cleaner energy and is also part of EET.
- EET Biofuels is investing in the development of 1 MT of low-carbon biofuels and is also included in EET.
- EET’s investment programme will have a significant impact on expediting the UK’s shift to low carbon while also aiding the government’s decarbonization agenda and generating highly specialized job opportunities in the Northern Powerhouse economy.
The funds will be invested in various fields, including hydrogen generation technologies, decarbonization, biofuels for both road and aviation, and infrastructure projects. As a result, North West England will quickly become one of Europe’s top post-carbon industrial clusters. EET anticipates that these expenditures will reduce about 3.5 million tonnes of CO2 emissions, accounting for nearly 20% of total industrial emissions in North West England.
The introduction of EET represents Essar’s revival and strategy move towards expansion. Essar is investing in modern, efficient assets that use environmentally friendly and socially responsible technology that will last for many years. In addition to EET, the Essar Group intends to make other sustainability investments, such as establishing an LNG value chain in India, which will include LNG truck manufacturing and fuel stations, building a pellet plant in Odisha, India’s easternmost state, and constructing a 4-million-tonne-per-year green steel complex in Ras-Al-Khair, Saudi Arabia.
The EET plan is founded on the understanding that hydrogen and biofuels are becoming increasingly essential fuels worldwide and that the UK is well-positioned to lead the rapid growth of the European low-carbon fuels industry. The United Kingdom already has advanced regulatory and policy frameworks to support low-carbon energy production, such as the government’s target of producing 10GW of hydrogen by 2030 while also developing low-carbon hydrogen infrastructure, expertise, and meeting significant customer demand. Moreover, the market growth opportunity is so enormous that EET believes that diverse low-carbon sources could account for about two-thirds of its aggregate cash flows by the decade’s end.
Essar’s Stanlow plant, a key component of the HyNet cluster, is already playing an essential role in the UK’s energy transition planning framework. The UK government chose HyNet as one of just two hydrogen clusters in the country to receive full operational funding in 2021.
As part of EET’s decarbonization ambitions, the Stanlow refinery will reduce carbon emissions by 75% by the end of this decade. This plan will make the refinery, an important fuel supplier to the UK, one of the most environmentally friendly in Europe.
EET will invest US$2.4 billion in the UK and US$1.2 billion in India to build a cost-effective global supply hub for low-carbon fuels. Green hydrogen and green ammonia will be supplied from India to address this hub’s growing worldwide demand for green hydrogen.
EET’s investment in India will assist the country in meeting its emerging hydrogen ambitions. As defined in its National Green Hydrogen Mission, which was adopted on January 4, 2023, the Indian government has established a supporting regulatory framework to make the country a leading global centre for green hydrogen production and exports.
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 that 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.”
