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Jim Ratcliffe gets behind the hydrogen energy rush

Sir Jim Ratcliffe's chemicals empire is getting behind the global hydrogen rush, investing £25m in a new fund that will join the main London stock market. 

neos's energy division is buying 25m shares in HydrogenOne Capital Growth, amounting to 10pc of the £250m the fund is raising in an upcoming float. 

It is a relatively small sum for Ineos which makes annual revenues of $61bn (£44bn), but reflects its growing ambitions in energy beyond its oil and gas business, as well as soaring interest in hydrogen as countries try to slash their carbon emissions.  

Brian Gilvary, the former BP finance chief who now runs the Ineos energy division, said the investment was an important business opportunity. 

"HydrogenOne has done a good screening of the projects out there and has a good handle on the policies in different jurisdictions," he said. 

"It will be a very attractive investment for us and a platform to test and see how this market unfolds ... it means Ineos Energy is playing now in a broader spectrum in the energy transition."

Ineos's £25m gives it co-investment rights and allows the company to appoint a director to the fund's board. 

Several governments have made hydrogen a core part of their strategies in a bid to meet the goals of the Paris agreement to cut global warming because it does not produce carbon emissions when burned. 

However, most of the world's hydrogen is made from natural gas - a process that produces vast amounts of carbon emissions. 

Clean hydrogen must be made via electrolysis or for the emissions from natural gas production to be captured and stored. 

The extent to which clean production of hydrogen will take off at scale is unclear because it is expensive and the fuel is relatively inefficient. 

Ineos is already Europe's largest hydrogen producer, making about 300,000 tonnes annually mostly alongside its chemicals business. About a fifth of its hydrogen is made through electrolysis. 

HydrogenOne Capital Growth will be the first UK-listed investment company to focus on hydrogen.  

It points to research showing governments have announced more than $70bn in funding for hydrogen, and believes clean hydrogen could hit sales of $2.5trn by 2050.

The fund plans to invest in public and private hydrogen companies and projects as well as energy storage and carbon capture projects, focusing on developed markets such as Europe, the US, the Gulf and Asia. 

HydrogenOne Capital, the parent company to the new fund, was set up in 2020 by Richard Hulf, a fund manager who has worked as an engineer for Exxon and others, and Dr John Joseph Traynor, a former Shell executive. 

Simon Hogan, a former Morgan Stanley banker, is chairman of the fund. 

He said: "The offering here is for distinctive and specialist access to the growth potential in clean hydrogen energy, that is simply not available elsewhere. We welcome Ineos’ investment in the company and we are looking forward to expanding our collaboration."

Founded by Sir Jim, Ineos made a major move in the energy market in 2017 by buying Dong Energy's North Sea oil and gas business, and has since expanded its presence in the North Sea. 

It has also branched out into several new areas in recent years, buying Belstaff, the motorbike jacket maker, and Lausanne-Sport football team, and designing a rival to the Land Rover Defender.

Ineos has also continued down its more traditional path, buying the remainder of BP's petrochemical assets for $5bn in June last year.  

Reference: The telegraph: Rachel Millard