Energy transition: Essar launches EET, to invest $ 3.6 bn in the UK and India
Virendra Pandit
New Delhi: The Essar Group on Monday announced the formation of Essar Energy Transition (EET) to drive the creation of the United Kingdom’s leading energy transition hub in North-West England.
EET plans to invest a total of USD 3.6 billion in developing a range of low-carbon energy transition projects over the next five years, of which USD 2.4 billion will be invested across its site at Stanlow, between Liverpool and Manchester, and USD 1.2 billion in India, the company said in a statement.
It said EET will include Essar Oil UK, the company’s refining and marketing business in North West England; Vertex Hydrogen, which is developing 1 gigawatt (GW) of blue hydrogen for the UK market, with follow-on capacity set to reach 3.8GW; EET Future Energy, which is developing 1 GW of green ammonia in India, targeted at UK and international markets; Stanlow Terminals Ltd, which is developing enabling storage and pipeline infrastructure; and EET Biofuels, which is investing in developing 1 MT of low carbon biofuels.
EET’s investment program will play a major role in accelerating the UK’s low-carbon transformation, supporting the government’s decarbonization policy, and creating highly skilled employment opportunities at the heart of the northern powerhouse economy.
The investments, across a range of hydrogen production technologies, decarbonization, biofuels (road and aviation), and infrastructure projects, will contribute to North West England quickly becoming one of Europe’s leading post-carbon industrial clusters. “EET believes that these investments will support the reduction of around 3.5 million tonnes of carbon dioxide, around 20 percent of the total industrial emissions in North West England.”
The launch of EET heralds Essar’s repositioning for growth and resurgence. The group is now investing in new forward-looking assets with modern, efficient, and ESG-compliant technologies to last for several decades.
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 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.
In addition to the USD 2.4 billion investment in the UK, EET will also invest USD 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 Government of India’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 in January 2023.
