The UK’s major oil refiner, Essar Oil, has planned to invest around USD 1 billion in building two new blue hydrogen production facilities at Standlow refinery in England. The company seeks approval for the same from Cheshire West and Chester council where the project’s planning application has been submitted.

Post-approval, the company is targeting to initiate the construction of the two blue hydrogen plants by 2022 end and commence plant operations by the mid-2020s. This project is set to empower the UK’s low-carbon energy project ‘Hy-Net North West’ which will mark the country’s unique transition to net-zero.

Blue hydrogen is produced from natural gas feedstocks through steam methane reforming or auto thermal reforming process that releases high amounts of carbon dioxide along with hydrogen gas. The emitted carbon dioxide is captured and stored underground thus eliminating the chances of the release of carbon dioxide into the atmosphere. Blue hydrogen has, therefore, gained the title of low-carbon fuel that can be extensively used to generate electricity, fuel transports, heat buildings and store energy.

As per ChemAnalyst, the concept of blue hydrogen production is increasingly gaining popularity with companies who are targeting to reduce carbon emissions from their production base. Essar Oil’s planned project is a step forward towards the company’s transition to low-carbon operations. However, the not-so economical blue hydrogen production process may not be able to render lowering of hydrogen prices. Nevertheless, the increasing demand for hydrogen, which is anticipated to grow at a CAGR of 5% in the upcoming years, and increased hydrogen supply facilitated by these facilities may reverse the upward going pricing trend.