Ineos said on Wednesday it will convert its Grangemouth petrochemicals plant and oil refinery to run on hydrogen at a cost of more than £1 billion to help make it net zero for carbon emissions by 2045.
Ineos Grangemouth chairman Andrew Gardner said the company would initially use gas to produce its own hydrogen on site — so-called blue hydrogen — with at least 1 million tonnes of carbon dioxide (CO2) stored and captured by 2030.
“The next stage would be using green hydrogen,” said Gardner, to bring the entire site to net zero by 2045.
Petroineos operates the Grangemouth refinery and is a joint venture between Ineos and PetroChina.
As Scotland’s only crude oil refinery, Petroineos is the primary supplier of aviation fuel for Scotland’s main airports and the major supplier of petrol and diesel across Scotland’s central belt, as well as in Northern Ireland and northern England.
Ineos O&P UK operates the olefins and polymers petrochemical plants at Grangemouth. The raw materials used by the business present an “outlet” for North Sea gases, delivered via the Forties Pipeline System.
Ineos FPS operates the Forties Pipeline System, landing and processing 40% of North Sea oil and gas production for onward domestic and international sales.
Ineos Acquired the Forties Pipeline System from BP in October 2017.
In a statement, Ineos said: “Ineos and Petroineos at Grangemouth fully support the Scottish Government targets to reduce emissions to net zero by 2045 as part of a just transition to a low carbon economy …
“Today, it announces the next phase of its Road Map to deliver emissions savings of more than 60% across the site by 2030 as it continues to make reductions towards net zero emissions by 2045 in Scotland …
“Ineos Grangemouth has today announced planned further investment of over £1 billion towards reducing greenhouse gas emissions at its site to net zero by 2045, building on the 37% reduction in net CO2emissions already delivered since acquiring the site in 2005.
“Ineos has already committed over £500m spend on projects which are approved and currently being implemented at Grangemouth.
“This includes investment in our New Energy Plant, which is due for completion in late 2023 and will supply energy to all our site operations and the highly efficient technology will drive down emissions by at least 150,000 tonnes of CO2per annum.
“Today’s announcement includes in excess of a further £1 billion spend to enable this next phase of the transition to net zero.
“Our Road Map will deliver a reduction in excess of 60% in greenhouse gas emissions by 2030 through a series of investments, partnerships, and innovative engineering.
“The Road Map involves 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 CO2by 2030.
“This will include capturing CO2from existing hydrogen production and the construction of a world-scale carbon capture enabled hydrogen production plant.
“Additional contributions to driving down emissions will come from further investments in energy reduction and optimisation, along with electrification of key equipment.
“There will also be a shift in our polymer product portfolio to include higher levels of post-consumer recycled content as we contribute to a growing circular economy.”
The Scottish Government’s Net Zero Secretary Michael Matheson said: “I welcome this significant investment, which demonstrates Ineos’ support for Scotland’s journey to becoming a net-zero economy by 2045.
“This will not only drive forward innovation and diversification to tackle emissions at Grangemouth, but will also support the decarbonisation of other sectors, sites and regions across Scotland.
“Low-carbon hydrogen offers the swiftest decarbonisation route for our industrial sector and today’s commitment by Ineos makes an even stronger case for the UK Government to select the Scottish Cluster, which Ineos partnered with in the summer, to be among the first CCS clusters to be awarded funding through its current cluster sequencing process
“Grangemouth, and Ineos itself, already holds a wealth of experience in engineering solutions and hydrogen production, and this new investment holds great potential for the future of Grangemouth, as well as the vital jobs that are located there, as part of our just transition to net zero.”