Hydrogen projects are gaining momentum in Houston as the climate law pushes renewable energy

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Coalitions of energy companies are lining up to build hydrogen projects as inflation-mitigating legislation ignites a fire among an industry that has already leaked.

Companies like New York-based New Fortress Energy and European fertilizer company OCI are moving forward with separate hydrogen projects in Beaumont, joining several big oil majors planning their own projects in the region, according to recent announcements. Chevron and Houston-based chemicals giant LyondellBasell announced last week that they will be working with European companies Air Liquide and Uniper to “pursue” a hydrogen project on the Gulf Coast.

Energy companies are so far revealing few details about their projects as they wrestle for a piece of what some believe could grow into a $1 trillion market. The alternative to fossil fuels is gaining traction to eliminate emissions from ships, manufacturing plants and other industries that are difficult to electrify.

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ExxonMobil plans to build the nation’s largest hydrogen plant at its Baytown refinery and petrochemicals site. ConocoPhillips is working with Japanese utility JERA on a clean hydrogen facility on the Gulf Coast. BP is working with British industrial company Linde to mitigate CO2 emissions from its Texas hydrogen plants.

The push is bolstered by billions of dollars worth of hydrogen tax credits available through the federal Inflation Reduction Act, which doubles the $7 billion granted to the Department of Energy last year to develop six to 10 hydrogen centers across the country .

The industry-heavy Gulf Coast region offers an ideal opportunity to show the world how carbon capture and hydrogen technologies can provide “instantaneous” solutions from areas with high emissions that are difficult to reduce, said Adam Peters, CEO of Air Liquide’s US subsidiary.

Air Liquide’s potential hydrogen project with Chevron, LyondellBasell and German utility Uniper would be “truly transformative” for the region, said Marc Merrill, CEO of Uniper’s North American subsidiary.

Fertilizer company OCI has begun building a Beaumont plant capable of producing 1.1 million tons per year of hydrogen-based “blue” ammonia, joining Exxon and CF Industries in the race to produce a fuel the companies said that it could play an important role in decarbonizing industrial facilities such as refineries, petrochemical plants and power generators.

Companies aim to sell hydrogen as a replacement for natural gas, which is the main fuel for power generation. A project being developed by New Fortress Energy would construct a 120 megawatt hydrogen plant at Beaumont. Last week the company announced that it would be partnering with retail electricity provider Entergy Texas for a substation and transformer hookups at the site

“New Fortress Energy’s facility is a significant development for Southeast Texas,” said Eliecer Viamontes, CEO of Entergy Texas, noting that the project complements his company’s hydrogen-powered power plant project in East Texas.

The preliminary agreement between New Fortress and Entergy sets the stage for the companies to collaborate on renewable electricity generation and for Entergy to purchase green hydrogen from the Beaumont facility for use at its nearby power plant.

According to Entergy, the investment is part of its $2.5 billion spending plan to support clean energy development in the region over the next two years. New Fortress expects to start producing green hydrogen in Beaumont as early as 2024.

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