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Ineos plans hydrogen production for transport from UK Runcorn chemicals site

Highlights

Upgrades 7,000 mt/year output to fuel cell quality

Hydrogen byproduct of chemicals production

Part of wider $2.3 bil European investment

Ineos subsidiary Inovyn produces 7,000 mt of hydrogen a year at Runcorn, and plans to upgrade the gas to supply compressed fuel cell quality hydrogen for the mobility and power generation sectors.

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"Hydrogen-powered transport will play a critical role in the UK's journey to net-zero," Inovyn CEO Geir Tuft said.

"As the UK's leading producer of low-carbon hydrogen, we're perfectly positioned to drive down emissions reductions in the transport and industrial sector," Tuft said.

Related story: Ineos plans $2.3 bil green hydrogen investment in Europe

The "tens of millions of pounds" investment at the plant, part of a previously announced Eur2 billion ($2.3 billion) in renewable hydrogen production across Europe in the next 10 years, will deliver facilities for the purification and compression of the gas.

Inovyn plans to load and distribute the hydrogen to fueling stations across the UK, with production ready for 2023, an Ineos spokesperson said at a launch event in Runcorn.

The company produces hydrogen at the site as a byproduct of its chlorine and caustic soda production by electrolysis of saltwater.

The bi-polar electrolysis process is powered by grid electricity, though the company plans to switch its power supply to renewables in the future, potentially using power purchase agreements, a company spokesperson told S&P Global Platts.

The company may consider expanding production in future with an alkaline electrolyzer to split hydrogen from pure water, Ineos electrochemical solutions business manager Terry Healy said at the event.

Hydrogen production from Runcorn could power over 1,000 buses or 2,000 trucks, Ineos said.

Ineos produces around 400,000 mt/year of hydrogen through a mixture of reforming of fossil fuels and via electrolysis. It has plans to decarbonize its processes using carbon capture and storage for its methane reforming processes and renewable electricity to power electrolysis of water.

Industrial clusters

Ineos is also part of the HyNet industrial decarbonization cluster consortium in the UK's northwest, which received government backing on Oct. 19 to take its carbon capture and storage plans forward.

Inovyn plans to develop 19 salt caverns in the region to store hydrogen totaling 1.3 TWh of energy storage.

Inovyn Storage Projects Manager Richard Stevenson told Platts the company had existing planning consent to store gas in salt caverns, and hoped to convert that consent to store hydrogen instead.

Only minor technical changes would need to be made for the storage of hydrogen, he said.

Stevenson said it was important to get hydrogen business models established in the UK, to underpin the investment needed to develop production, storage and transport infrastructure. The lead-in time from a project decision until it was operationally ready could be around four to five years, he said.

Ineos also has an agreement with the Scottish Acorn CCS project, which failed to secure government funding in its announcement Oct. 19. It plans to use the Acorn facility to decarbonize its operations at the Grangemouth refining and petrochemical complex.

Record-high power and gas prices have sent calculated costs of hydrogen production soaring in recent weeks. But costs are expected to fall dramatically by 2030.

S&P Global Platts assessed the cost of producing hydrogen via alkaline electrolysis in the UK (including capex) at GBP12.55/kg ($17.30/kg) Oct. 20. PEM electrolysis production was assessed at GBP14.88/kg, while blue hydrogen production by autothermal reforming was GBP5.00/kg (including capex, CCS and carbon).

Transport applications

INEOS Automotive division, meanwhile, is developing a fuel cell Grenadier 4x4 vehicle using Hyundai Motor Company technology, the company said Oct. 18. Testing of the fuel cell Grenadier is to begin by the end of 2022 alongside an electric version.

Hydrogen infrastructure, however, needed government push on legislation and investment, INEOS founder Sir Jim Ratcliffe said.

"The German government is well advanced with nine billion euros committed and over 200 filling stations operational. The UK government has yet to get out of the blocks but hopefully soon will. The UK has only a handful of hydrogen pumps today," he said.

Inovyn UK country and operations manager Nigel Bouckley said the company had the production technology, and demand from end users was emerging, but the infrastructure to link the two was lacking.

"We need government to close the gap between the manufacturer and the user," Bouckley said at the launch.

No offtake agreements had yet been signed, though the company was in talks with multiple parties, Bouckley said.

Stevenson said potential end users could include bus operators in Liverpool as well as other transport applications and mobile power generation providers.