Marcos Matijasevich and his team at EET Fuels received some important news in late March: the UK government had approved the development of Eni’s onshore CO₂ pipeline linking the HyNet North West low-carbon industrial cluster in northwest England to offshore storage capacity under the Irish Sea.

The decision marked a key milestone for India-owned EET’s $2.4b plan to decarbonise the Stanlow oil refinery at Ellesmere Port, which sits within the HyNet cluster and produces about 16% of the UK’s road transport fuels.

The pipeline will take CO₂ captured from two blue hydrogen production facilities under development at Stanlow, and one other refinery process unit, to offshore storage facilities operated by Eni.

“We believe we are going to be the most advanced decarbonised refinery” Matijasevich, EET Fuels

“The pipeline essentially has an aboveground installation, which is a point of connection where we will put the CO₂ from the hydrogen plants,” said Matijasevich, head of low carbon transition at EET Fuels, formerly Essar Oil (UK).

“That means that now we are the only refinery in the UK to have direct access to a CO₂ pipeline, which is so precious for any industry sector looking to decarbonise,” he told Hydrogen Economist in an interview.

EET has selected Denmark’s Topsoe, US firm Elessent Clean Technologies and Japan’s MHI to develop the carbon-capture process at Stanlow. FID is expected next year on the CCS projects, provided government support can be secured under the HyNet Track One Expansion process, Matijasevich said.

Eni aims to have 4.5mt/yr of CO₂ storage capacity available by the second half of this decade, rising to 10mt/yr after 2030. Storage will be developed at its depleted Hamilton, Hamilton North and Lennox fields in the Irish Sea.

All the captured CO₂ from Stanlow will, at least initially, be pumped into permanent storage as this is a condition of government support for the CCS project. However, EET is in talks with potential partners for the production of e-fuels within the HyNet cluster. “We are in discussions, but it is not our short-term intention before 2034,” Matijasevich said.

Blue hydrogen

The Stanlow project includes two blue hydrogen plants, fuel-switching to hydrogen in a new furnace and widespread electrification.

Blue hydrogen production capacity is under development by EET Hydrogen, a standalone subsidiary that has plans to deliver around 1.35GW of low-carbon hydrogen in the UK by 2030, with follow-on capacity of up to 4GW.

At Stanlow, FID on the first blue hydrogen plant is expected in September. The plant will produce 350MW of hydrogen using byproduct refinery offgas as a feedstock.

A second plant will produce 1,000MW. The company hopes to secure government support under the UK’s low-carbon hydrogen business model subsidy scheme next year, enabling it to move to FID. The first project already has in place a statement of principles for government support.

The main offtakers for the first plant’s output will be a new furnace in the crude distillation unit that will run on 100% hydrogen, along with a neighbouring glass-making facility.

“The furnace is already bought. What we need to do now is to reach FID in the next few months on the first phase of the combined heat and power plant,” Matijasevich said.

Refinery blueprint

Matijasevich reckons the transformation of the site can provide a template for refinery decarbonisation globally.

“From what we have seen across the US, Europe, the EU and the UK, we believe we are going to be the most advanced decarbonised refinery,” Matijasevich said. “In fact, we are going to be the first refinery to decarbonise more than 85% before the third decade and, in fact, by 2028–29, so that offers confidence that we can provide a blueprint for other refineries.”

Fuel switching is the optimal way to decarbonise most of the processes at Stanlow, Matijasevich said. “We could have simply applied carbon capture to everything, but we did the feasibility study about three years ago and that turns out to be ten times more expensive,” he said. “Fuel switching, that is the secret. We only use carbon capture where we cannot fuel switch.”

Carbon leakage

Stanlow’s access to onsite low-carbon hydrogen production and its connection to a CO₂ transport network give it unique advantages over other UK refineries in terms of the decarbonisation process, something for which other refineries may need additional support. There is a risk of carbon leakage, where refining capacity could move to other regions with less stringent emissions rules than the UK.

Inclusion of the refining sector in the UK and EU's carbon border adjustment mechanisms (CBAM) could help to address this risk, he said.

The CBAM, designed to impose a carbon cost on imports to align them with EU carbon limits, is due to enter into force in 2026 but will not cover the refining sector. The UK has signalled it will launch its own CBAM in 2027, but current plans do not envisage the inclusion of the refining sector.

“It is important that the carbon-leakage risk associated with refining is considered as the UK and EU carbon border adjustment mechanisms are being developed,” Matijasevich said. “Decarbonisation is a priority for our industry, particularly as we see UK carbon levies rise and UK free CO₂ allowances vanish. A well-designed CBAM can provide a level playing field for UK refineries as they to continue to compete globally whilst implementing their decarbonisation strategies.”

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Author: Stuart Penson