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Leading UK-focused downstream energy company Essar Oil UK plans to install a new 45 million pound refinery-based hydrogen furnace.

The furnace will have an improved energy efficiency of four per cent compared to existing furnaces, which will save 16,600 tonnes of carbon dioxide per annum, as well as reducing ongoing maintenance costs.

The furnace is set to be installed in 2022 and will become fully operational by next year.

From 2026 onwards, it will be fuelled by hydrogen produced at Stanlow as part of the 'HyNet North West' decarbonisation cluster.

Essar's new joint venture, Vertex Hydrogen, will develop the world's first and largest blue hydrogen production plant at Stanlow.

According to the company, the project to set up the furnace marks another significant milestone in Essar's continued commitment to becoming the UK's first low carbon refinery.

It follows the launch of Vertex Hydrogen last month in which the company will invest 1 billion pounds over the next five years to drive down emissions, including the development of new hydrogen production plants at Stanlow, forming a central part of the 'HyNet North West' decarbonisation cluster.

"We have hugely ambitious plans for Stanlow and are committed to making it the UK's first low carbon refinery," Essar Oil CEO Deepak Maheshwari said.

"By affecting a significant and rapid transition to hydrogen, we are securing the long term future of this vitally important national asset whilst also playing a key role in supporting the UK's plans for building the low carbon economy of tomorrow."