Trafigura has approved the final investment decision for a 20 MW green hydrogen facility in Milford Haven, Wales, through its wholly owned subsidiary MorGen Energy. The West Wales Hydrogen project is among the first schemes supported under the UK Government’s Hydrogen Allocation Round 1 to reach this milestone.

Construction is expected to begin in 2026, with commissioning targeted for early 2028. Once operational, the plant is projected to produce approximately 2,000 tonnes of low carbon hydrogen per year, in line with the UK Low Carbon Hydrogen Standard.

 

Public Support Framework Enables Project Delivery

 

The project has secured 15 years of revenue support under the UK Hydrogen Production Business Model and grant funding from the Net Zero Hydrogen Fund through the Hydrogen Allocation Round 1 framework. These mechanisms are designed to bridge the cost gap between low carbon hydrogen and conventional fuels, improving project bankability.

Project financing is being provided by Lloyds and Societe Generale, reflecting growing lender participation in UK hydrogen infrastructure. The electrolyser system will be supplied by Sheffield based ITM Power, linking the project to domestic manufacturing capacity in hydrogen technology.

 

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Industrial Applications and Emissions Impact

 

The West Wales Hydrogen facility will be built on the site of a former oil refinery within the Celtic Freeport. The location is intended to support port decarbonisation and industrial demand in south Wales.

Hydrogen from the plant is expected to serve applications including industrial heating, manufacturing processes, port operations and use as a chemical feedstock. Annual emissions savings are projected at more than 15,000 tonnes of CO2 equivalent.

The facility has been designed with expansion potential in future phases, positioning the site as a possible hydrogen hub as demand develops.

 

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Regional Economic and Energy Transition Role

 

The project is expected to generate skilled employment during construction and involve local contractors. Government officials have positioned the development as part of a broader strategy to decarbonise industrial clusters while strengthening domestic energy resilience.

For Trafigura, the investment reflects a strategy to participate in emerging low carbon commodity markets. For the UK, it signals continued efforts to convert hydrogen policy support into operational infrastructure, particularly in regions with industrial legacy assets suitable for redevelopment.

If delivered on schedule, the West Wales Hydrogen plant will be among the first commercial scale low carbon hydrogen production facilities operating under the UK’s new hydrogen support regime.