INEOS announces blue hydrogen capacity at Grangemouth

LONDON (ICIS)–On 22 September, UK chemicals manufacturer INEOS announced investment of £1bn (€1.16bn) to support businesses across the Grangemouth industrial cluster in Scotland switching to hydrogen by 2030.

This can expand the UK’s potential blue hydrogen capacity from eight key projects to nearly 11GW by the end of the decade.

The investment would also support the development of carbon capture and storage (CCS) technology at the cluster, building on INEOS’s CO2 reductions. The company said it aimed to use the funding to reduce emissions from Grangemouth by 1m tCO2 by 2030.

When speaking to ICIS about the announcement, Andrew Gardner, chairman of INEOS Grangemouth, noted the potential to meet this emissions capture target within the approaching seven years.

However, this would be dependent on the Scottish Cluster’s acceptance onto Phase 1 of the UK government’s cluster sequencing programme, Gardner continued.

Grangemouth industrial cluster is part of the wider Scottish Cluster programme, which aims to drive decarbonisation across Scotland. The Scottish Cluster is currently one of five potential recipients of UK government funding from its cluster sequencing programme. Successful funding could enable the development of CCS transport and storage infrastructure.

Acceptance onto Phase 1 of the programme, which aims to bring two UK clusters online with CCS transport and storage infrastructure by the mid-2020s, would support the Acorn CCS project, enabling industrial emissions captured across Scotland and Britain to be stored in the North Sea.

“If Acorn makes Phase 1 then the aspiration is to be ready for 2027, and our plans and our plants that can capture the CO2 would be ready for that time,” Gardner said.

However, in the absence of Phase 1 selection, Gardner pointed to 2030 as a target year to achieve the 1 million tonne reduction.

Gardner said that he felt Acorn would be part of a successful Phase 1 selection programme as a result of the vast CO2 storage potential associated with the project.

HYDROGEN PRODUCTION

“There’s so many directions you can go here. For us, there’s two parts to INEOS. There’s the part up here which is within the industrial heartland of Scotland. And I think our path in the next 10 years is blue hydrogen[…] We have to go world-scale and proven hydrogen production,” Gardner said.

He identified that new blue hydrogen technology can have capture rates of up to 95-97%.

“Other parts of INEOS include its hydrogen business based on electrolysis, which lends itself much better to green hydrogen,” Gardner said. The green hydrogen side of the business is building to the scale required for clusters such as Grangemouth, meaning in the future this technology could be used to further reduce emissions.

“If we were having this conversation in 2027 and we were talking about our target to 2035 it will probably be incremental carbon reduction as we move more hydrogen in through the green route as technology and infrastructure that supports it is further developed,” Gardner added.

The planned hydrogen production capacity with CCS at Grangemouth could reach around 150,000 tonnes/hydrogen per year, according to Gardner. Based on ICIS analysis this would amount to capacity of around 700MW at higher heating value (HHV).

Such hydrogen production capacity would further strengthen the UK’s position as a large-scale blue hydrogen producer. Including Grangemouth, eight UK blue hydrogen projects could account for nearly 11GW of capacity online ahead of 2030 – more than double the UK government’s target as stated in its hydrogen strategy.

The Grangemouth cluster’s offtake from the national transmission system over 2020 averaged 1.93 million cubic metres (mcm)/day.

To draw the same energy content from blue hydrogen, offtake could rise to 2.27mcm/day to account for efficiencies of blue hydrogen production technologies, based on ICIS analysis.

BEYOND GRANGEMOUTH

Gardner also said that hydrogen production from Grangemouth could support decarbonisation of wider sectors such as transport or via blending of hydrogen into the national transmission system.

As well as this, Gardner noted that hydrogen from Grangemouth could support a wider UK market as infrastructure beyond the cluster develops, supporting decarbonisation of other domestic areas of manufacturing and industry. This would enable clearer regulation and tracking of emissions, as well as avoiding emissions from international freight.