The planned hydrogen facility by ExxonMobil in Baytown, Texas, faces an uncertain future due to recent adjustments in hydrogen tax credits introduced under the Trump administration’s “big, beautiful bill.” These legislative changes have altered the timeline for construction, now requiring projects to commence by 2028 to qualify for the 45V tax credit, a substantial shift from the original deadline of 2033. During an earnings call, Exxon CEO Darren Woods highlighted the project’s complexity, emphasizing the need for a simultaneous development of supply, demand, and regulatory frameworks.
Woods expressed concern about the broader market development necessary for transitioning the project from being government-subsidized to a market-driven enterprise. He noted that while the Baytown project could meet the 2028 construction start deadline, the feasibility of advancing without clear market pathways remains a challenge. The project’s intended output is substantial, aiming to produce around 1 billion cubic feet of low-carbon hydrogen per day, which could significantly fuel Exxon’s Baytown operations or be marketed to other entities.
The project is also pivotal in supporting Houston’s aspiration to achieve carbon neutrality by 2050, potentially reducing Exxon’s carbon emissions by 30% through hydrogen use. Furthermore, Exxon’s carbon capture and storage initiative is set to accommodate about 10 million metric tons of carbon dioxide annually, positioning it among the largest global efforts. This initiative aligns with a regional ambition to transform Houston into a carbon capture hub, targeting a cumulative storage of 100 million metric tons by 2040 across various facilities.