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Essar Oil UK on Monday achieved a new milestone in its ongoing transition to low carbon operations, following the UK governments decision to shortlist the construction of a new hydrogen project and separate carbon capture project at its site in Ellesmere Port, Cheshire.

The announcement by the Department for Business, Energy & Industrial Strategy (BEIS) confirmed that the projects had been selected as part of the UK government's Carbon Capture, Usage and Storage (CCUS) Cluster Sequencing programme.

The new hydrogen plant will help Essar deliver its goal of producing 3.8GW of low carbon hydrogen by the end of the decade almost 40 per cent of the government's recently extended target of achieving 10GW by 2030.

Part of HyNet, the plant is being built by Vertex Hydrogen and will significantly reduce CO2 emissions every year. The project will also create thousands of new jobs in the North West and North Wales.

The installation of industrial carbon capture technology at the Stanlow refinery, which will enable the direct capture of more than 800,000 tonnes of CO2 per year, is also shortlisted.

The two projects form just part of the company's 1 billion pound investment in a range of energy efficiency, low carbon energy and carbon storage initiatives, designed to decarbonise its production processes and put Essar at the forefront of the UK's shift to low carbon energy. The company has plans underway to reduce its emissions by 90 per cent before the end of the decade.

As part of Essar's ongoing investment, the company announced in February its plans to install a new 45 million pounds furnace, capable of running 100 per cent on hydrogen, the first of its kind in the UK. The furnace will arrive at Stanlow in August via the Manchester Canal, becoming fully operational in 2023. It will deliver major improvements to onsite energy efficiency and has the potential to reduce 242,000 tonnes of CO2 every year once it is powered by hydrogen from 2026.

Deepak Maheshwari, Chief Executive Officer at Essar Oil UK, commented: "Essar Oil UK continues to deliver on its promise of leading the UK's low carbon transition. Our programme of major investment is decarbonising our own operations and supporting the development of low carbon economy across the North West and North Wales, creating thousands of jobs and securing the long-term future of this crucial facility."