Trafigura subsidiary MorGen Energy approves FID for green hydrogen project in Wales

Trafigura has announced that its wholly owned subsidiary MorGen Energy has taken final investment decision (FID) to build a 20 MW green hydrogen production facility in Milford Haven, Wales.

The project, known as West Wales Hydrogen, is among the first initiatives supported under the UK government’s Hydrogen Allocation Round 1 (HAR1) programme to reach the FID stage. Construction is expected to begin in 2026, with operations planned to start in early 2028.

Once operational, the plant is expected to produce approximately 2,000 tonnes of low-carbon hydrogen annually. The hydrogen will be supplied for several uses, including port decarbonisation, industrial heating, manufacturing processes and chemical feedstock applications.

Hydrogen hub planned at former refinery site

The facility will be located at the site of a former oil refinery within the Celtic Freeport area in Milford Haven. The project is designed with potential for expansion in later phases as demand grows, with the location positioned to support industrial decarbonisation efforts across south Wales.

MorGen Energy has selected ITM Power to provide the electrolyser system for the facility. Financing for the project is being arranged through Lloyds Banking Group and Societe Generale.

Richard Holtum, CEO of the Trafigura Group, said:

“The UK government’s hydrogen support framework was key to this project reaching final investment decision – demonstrating how public policy and private capital can work together to support the decarbonisation of hard-to-abate industries. The West Wales Hydrogen project reflects Trafigura’s ability to commercialise emerging commodity markets, connecting new supply with customers seeking reliable, low-carbon solutions.”

Werner Lieberherr, CEO of MorGen Energy, said:

“Reaching FID on West Wales Hydrogen is a defining milestone for MorGen and the UK hydrogen sector. This project demonstrates that green hydrogen projects in the UK can be delivered as bankable infrastructure investments when strong industrial demand is combined with a clear and stable policy framework. We are grateful for the strong support of the UK Government, especially the Department for Energy Security and Net Zero, and our partners, and we look forward to beginning construction and delivering hydrogen to our customers from 2028.”

Government support for hydrogen development

The project has secured revenue support for 15 years through the UK government’s Hydrogen Production Business Model, along with grant funding from the Net Zero Hydrogen Fund under the HAR1 programme. The hydrogen produced will comply with the UK’s Low Carbon Hydrogen Standard.

Michael Shanks, UK Minister for Energy, said:

“We are backing hydrogen because it is crucial in decarbonising industry, driving investment, boosting our energy security and creating hundreds of jobs in our industrial heartlands. This investment shows how Wales is embracing the clean energy transition, with one of the UK’s first commercial scale low-carbon hydrogen production plants creating new opportunities for local communities.”

Jo Stevens, Secretary of State for Wales, said:

“Wales is at the forefront of the green energy revolution and it’s great to see the West Wales Hydrogen project amongst the first in the UK to reach this stage, with the support of the UK Government. This is a huge milestone in the delivery of the project, which will create jobs and help grow the Welsh economy.”

According to the project developers, the facility could reduce carbon emissions by more than 15,000 tonnes of CO₂ equivalent annually once operational.