Indian conglomerate Essar has announced that will invest $3.6bn in India and the UK through a new entity to drive decarbonisation, the company said on 27 February.

The company announced the formation of Essar Energy Transition (EET), a new entity that will invest $2.4bn in the UK and $1.2bn in India to develop a range of low-carbon energy transition projects over the next five years.

EET will invest $1.2bn in developing a cost-efficient global supply hub in India for low-carbon fuels such green ammonia and green hydrogen, with the aim of exporting green ammonia from India to the UK and other European countries to meet rising market demand in these locations, Essar said.

Essar is currently developing 1 GW/yr of green ammonia production capacity in India for sale to the UK and global markets. Essar also plans to create an LNG value chain in India, including the production of LNG trucks and fuel stations and a pellet plant in the eastern state of Odisha. But the company did not provide further details on these projects.

The company said its aims for India will complement the government's goal of making the country a hub for green hydrogen production and export.

The Indian government, seeking to reduce its dependence on fossil fuels, had in early January approved the National Green Hydrogen Mission with an initial outlay of 197.44bn rupees ($2.38bn), aiming to produce 5mn t/yr of green hydrogen and 60-100GW of electrolyser capacity by 2030. The policy push from the government comes on the back of India's commitment to achieve net zero by 2070.

EET will also create an energy transition hub in North West England region in the UK. The new entity will invest $2.4bn in hydrogen production technologies, decarbonisation, biofuels and infrastructure projects, Essar said. The investments will reduce 3.5mn t of CO2 emissions, accounting for around 20pc of the total industrial emissions in North West England.

EET's decarbonisation plans will see Essar Oil UK's 195,000 b/d Stanlow refinery cut carbon emissions by 75pc before the end of the decade, Essar said.

Vertex Hydrogen, a joint venture between Essar subsidiary Essar Oil UK and low-carbon energy firm Progressive Energy, in January agreed to supply blue hydrogen to Tata Chemicals Europe, a subsidiary of India's Tata, for use at its Northwich plant in North West England.