ExxonMobil has paused plans for its giant blue hydrogen production plant in Texas, US, according to new reports.
CEO Darren Woods reportedly told Reuters that the company has been struggling to secure sufficient offtake from the one billion cubic feet per day plant, which had been targeting start-up in 2027-2028.
Unveiled in 2022, the project was intended to be developed within Exxon’s Baytown refining and chemicals complex to produce hydrogen from natural gas while capturing a high share of carbon dioxide emissions.
Portions of the blue hydrogen are set to be converted into ammonia for international offtake markets. Last year, Japanese majors and said they were exploring deals for buy volumes.
Air Liquide also announced it would transport the Baytown-made hydrogen through its along the US Gulf Coast.
However, the project had been facing increasing delays and uncertainty over the past year.
In August, Woods for key US clean hydrogen incentives could jeopardise the plant.
Under changes enacted in President Donald Trump’s recent tax and spending bill, projects now must start construction before the start of 2028 to receive subsidies from the 45V clean hydrogen tax credit.
Woods warned this window may not provide enough time to secure sufficient offtakers for the project.
“While our project can meet this timeline, we’re concerned about the development of a broader market, which is critical to transition from government incentives,” he told investors in August.
According to Reuters, Europe’s growing industrial slowdown and economic uncertainty had further dampened demand.
The news agency reported that Woods believes the company could restart the project, although the timeline is unclear.
H2 View has requested comment from ExxonMobil but has not yet received a response.
The delay doesn’t just come as a setback for Exxon, however. US blue ammonia projects had been slated to be among the first movers that could enable global hydrogen trade due to the supply of cheap natural gas and geology to support carbon capture in the region.
With question marks already lingering over other developments, like blue hydrogen plant, this move may further weigh on market confidence.