BP and Rio Tinto join forces

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BP and Rio Tinto have formed a jointly-owned company, Hydrogen Energy, to develop decarbonised energy projects, including hydrogen-fuelled power for large scale clean electricity generation.

Decarbonised energy projects use fossil fuel feedstock together with carbon capture and storage (CCS) technology. In power projects, the hydrogen would be used to fuel a gas turbine for generation of industrial-scale supplies of electrical power. Full integration with CCS technology would ensure that 90 per cent of the carbon dioxide which would otherwise have been emitted to the atmosphere would be safely captured and stored.

The new company will exploit Rio Tinto’s expertise and assets in coal extraction and supply together with BP's experience and expertise in chemical processing, low carbon power generation and carbon capture and storage.

Hydrogen Energy, whose final formation will be subject to regulatory approvals, will identify and secure opportunities for decarbonised energy projects worldwide, working with governments to determine appropriate policies and regulatory regimes, and develop and operate the assets, with partners where appropriate. The projects will typically use coal or petroleum coke as feedstock; although in some cases natural gas may be used.

The previously announced hydrogen-fuelled power projects in Peterhead, Scotland and Carson, California will become part of Hydrogen Energy. As part of the agreement, Rio Tinto will make a cash payment to BP of some $32m, subject to post-completion adjustments.

Hydrogen Energy will be headquartered in Weybridge, UK, and will initially have a staff of 75 seconded from the parent companies.