ECONOMY

Ineos to convert Grangemouth refinery to run on hydrogen

Ineos Group Ltd updates

Ineos is to invest more than £1bn in upgrading its Grangemouth refinery to run on hydrogen, as part of plans to slash emissions from one of Scotland’s largest industrial sites by 60 per cent by 2030.

The refinery and petrochemical facility near Falkirk, which provides the majority of fuel to Scottish service stations, is increasing efforts to reduce emissions and to prolong the life of the 210,000 barrel a day plant, which opened in 1919.

Scotland has targeted reaching “net zero” by 2045, five years ahead of England, and is pushing for what has been dubbed a “just transition” for the North Sea oil and gas sector, which became a significant contributor to the UK economy in the 1970s but faces declining production and a backlash against fossil fuels.

Ineos said the planned investment of more than £1bn, on top of £500m already committed to building new power stations at the 1,700 acre site, would see “a move to the production and use of hydrogen by all businesses at the Grangemouth site accompanied by carbon capture and storage of at least 1 million tonnes per annum of CO2 by 2030”.

The company also plans the electrification of suitable equipment at the plant.

Ineos says it has already cut emissions by 37 per cent at the site since acquiring it from BP in 2005, largely through running the facility on natural gas rather than heavy fuel oil.

The £1bn-plus investment in the site is tied to plans for the Acorn Carbon Capture and Storage Project on the north-east coast of Scotland, which is bidding to win UK government backing for decarbonising industrial clusters. Ineos and PetroIneos, which is a joint venture with PetroChina, signed a provisional agreement with the Acorn CCS Project earlier this year.

The project plans to make “blue” hydrogen with natural gas from the North Sea by capturing and storing the CO2 in depleted oil and gasfields.

Andrew Gardner, chair of Ineos Grangemouth, said that while the project in its current form was “contingent” on Acorn going ahead Ineos would not “rip up its plans” if it was not selected for government backing later this year.

“All of us want to be involved in the first tranche, but the government has always said it’s a phased approach to the industrial clusters,” Gardner said. “I think Acorn will get selected at some point. I’m quite confident it will in the first round. “With these plans, what we’re talking about here is a fundamental change of how the plant is powered.”

Scotland’s net zero secretary, Michael Matheson, said the plan would not only “tackle emissions at Grangemouth but will also support the decarbonisation of other sectors, sites and regions across Scotland”.

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