UK oil titan BP and UK-based international mining company Rio Tinto are to form a new jointly-owned company called Hydrogen Energy, which will develop decarbonized energy projects around the world alongside regional governments.
BP revealed that the venture will initially focus on hydrogen-fuelled power generation, using fossil fuels and carbon capture and storage (CCS) technology to produce new large-scale supplies of clean electricity.
The company said that fully integrating power generation with CCS technology will ensure that 90% of the carbon dioxide that would otherwise have been emitted to the atmosphere will be safely captured and stored.
BP reported that 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 pay BP a cash payment of around $32 million.
BP revealed that coal is necessarily a central part of power generation around the world, as it is abundant in developing countries where power demand is growing. Nevertheless, the company added that by developing CSS technology, the adverse environmental effects of coal could be dramatically reduced.
BP said that Hydrogen Energy will benefit from the strategic capabilities of both parent companies: Rio Tinto’s assets in coal extraction and supply, and BP’s experience in chemical processing, low-carbon power generation and CSS.
Tom Albanese, chief executive of Rio Tinto, said: Coal is a key part of Rio Tinto’s energy business and we believe it has an essential role in generating clean power in the future.
Tony Hayward, BP group chief executive, added: Projects such as these have the potential to help deliver the carbon emission reductions which companies and countries around the world are now seeking.