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Hydrogen hub hopes

Last year, Exxon Mobil announced it would be part of a team planning to build the largest clean hydrogen facility in the world in Baytown. Now, the company's executives are warning the project at its refining and petrochemical complex along the Houston Ship Channel might no longer happen, writes reporter James Osbourne.

At issue are draft rules issued by the Treasury Department late last year, which include no incentive to produce clean hydrogen fuel using natural gas with reduced methane emissions.

That would limit Baytown and other proposed blue hydrogen projects, which convert natural gas to hydrogen fuel and store the resulting carbon emissions underground, to the lowest tier of hydrogen tax credit, making them less economic, said Mark Klewpatinond, global business manager for hydrogen at Exxon Mobil.

Exxon is part of the HyVelocity Hub, a coalition of energy companies and nonprofits seeking to develop a clean hydrogen hub in Houston through $1.2 billion in funding from the Department of Energy. The warning from Exxon and other hydrogen developers comes amid questions about whether the tax credit included in 2022's Inflation Reduction Act will be enough to get the nascent industry off the ground.