ExxonMobil's flagship blue #hydrogen/ammonia plant planned at its #Baytown, Texas, refinery may get scrapped if the US' #45V tax credit guidelines aren't amended.
The major warned in comments to the Treasury Department that the federal model, known as 'Greet', used to calculate well-to-gate emissions for hydrogen projects does not use verifiable, real-world data to assess the potential value chain emissions profile. That means the estimated carbon intensity used to determine tax credit eligibility could be higher than what a company can actually deliver and leave out what otherwise would be an eligible project.
The pushback -- and claims that Baytown will be "unviable" under the current definitions -- may seem curious given that Exxon first publicly proposed the project months before the US Inflation Reduction Act (#IRA) and its 45V provisions even existed. But the company has insisted that while there is a need to prep and advance projects in nascent areas like #CCS and hydrogen before all the legal, regulatory and fiscal elements are in place to ensure swifter deployment, actual funding and development ultimately requires those boxes to be ticked.
In Exxon's case, the major had hoped that its Baytown H2 scheme could meet any government-incentivized emissions threshold as it targets a net-zero operational emissions value chain, ringfencing its Permian Basin gas (which is set to achieve net-zero Scope 1 and 2 emissions by 2030 on its assets and by 2035 on those it acquires from Pioneer) into Baytown and controlling the midstream operations connecting them.
Exxon is not alone in warning Treasury that its current guidance and seeming lack of opening for #bluehydrogen could kill the hydrogen economy before it even gets started. But the major's positioning is unique in that it sees Baytown being a poster child for what blue hydrogen can deliver by way of lower-carbon hydrogen -- and it may never get the chance to put its theory into practice.
Full story at Energy Intelligence:
https://lnkd.in/gdhpRUrt
