Essar Group bets $3.6 billion on decarbonisation in India and UK

Will invest $1.2 bn to develop a global supply hub for low-carbon fuels

Essar Group on Monday announced a fresh investment of $3.6 billion in setting up an Essar Energy Transition (EET) to spearhead green energy transition projects in the UK and India.

The green energy projects will include an investment of $1.2 billion in green ammonia manufacturing in India.

“We are setting up a green ammonia plant in India which will export products to the UK and other countries,” said Prashant Ruia, director, Essar Group.

The projects are expected to be commissioned by 2026-27.

The group will develop a range of low-carbon energy transition projects over the next five years, for which $2.4 billion will be invested across its site at Stanlow, between Liverpool and Manchester.

EET will include Essar Oil UK, the company’s refining and marketing business in Northwest England; Vertex Hydrogen, which is developing 1 gigawatt (Gw) of blue hydrogen for the UK market, with follow-on capacity set to reach 3.8 Gw; and EET Future Energy, which is developing 1 Gw of green ammonia in India, targeted at UK and international markets. 

In a statement, the group said the transition will also include Stanlow Terminals, which is enabling storage and pipeline infrastructure; and EET Biofuels, which is investing in developing 1 million tonne (mt) of low-carbon biofuels.

Ruia said ammonia will be manufactured in India and then shipped to the UK, Europe, and globally to meet expanding market demand for green hydrogen.

“We are in talks with a few state governments to select the site. We will decide on the manufacturing site in India very soon,” said Ruia. 

EET’s investment in India will help deliver on the country’s emerging hydrogen ambition.

The Indian government’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, Essar Group said in a statement.

“The launch of EET is a major milestone in Essar’s long-standing commitment to place 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 which will help eliminate about 20 per cent of the industrial carbon dioxide (CO2) 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,” said Ruia.

The group is in talks with several banks to fund the project which will be a mix of debt and equity.

EET’s investment programme is aimed at accelerating the UK’s low-carbon transformation, supporting the government’s decarbonisation policy and creating skilled employment opportunities in the heart of the Northern Powerhouse economy.

The investments, across a range of hydrogen production technologies, decarbonisation, biofuels (road and aviation), and infrastructure projects, hope to contribute to Northwest England becoming a leading post-carbon industrial cluster in Europe. 

The group said these investments will help reduce around 3.5 mt of CO2, about 20 per cent of the total industrial emissions in Northwest England.

In India, Essar Group is already investing in liquefied natural gas (LNG) truck manufacturing and LNG fuel stations and setting up a pellet plant in Odisha. It also plans a 4 mt per annum green steel complex at Ras Al-Khair in Saudi Arabia.

EET decoded

Essar Energy Trade:

> Essar Oil UK: The company’s refining and marketing business in Northwest England
 

> Vertex Hydrogen: Developing 1 Gw of blue hydrogen plant for the UK market; follow-on capacity expected to reach 3.8 Gw 
 

> EET Future Energy:  A 1 Gw of green ammonia unit in India, targeted at the UK and international markets

> Stanlow Terminals: Developing a storage and pipeline infrastructure in the UK

> EET Biofuels:  1 mt of low-carbon biofuels