ExxonMobil Eyes Hydrogen Production Decision Amidst Crucial Tax Incentives
Global, Saturday, 1 February 2025.
ExxonMobil plans to decide on a hydrogen facility this year, hinging on the vital 45V tax credit. A serious push towards sustainable fuels, with humour at fossil fuel-beating hydrogen. Important shift!
The Big Decision
I’ve been following ExxonMobil’s moves closely, and let me tell you - they’re making waves in the hydrogen space. CEO Darren Woods has emphasized that the hydrogen production tax credit 45V is absolutely crucial for their upcoming investment decision [1]. This isn’t just another business move; it’s about establishing a market where hydrogen can finally compete head-to-head with traditional fuels [1]. The stakes are high with ExxonMobil’s planned Baytown Low-Carbon Hydrogen project in Texas, which would be a game-changer, producing 1 billion cubic feet of hydrogen daily [1].
Technology Breakthrough
Here’s something exciting - ExxonMobil has already demonstrated their commitment to hydrogen with a remarkable technical achievement. In January 2025, they successfully tested burners operating at 98% hydrogen in their Baytown olefins plant [2]. I’m particularly impressed by the 90% reduction in direct CO2 emissions they achieved during testing [2]. This isn’t just talk - it’s real progress after four years of intensive research and development [2].
Financial Backing
Looking at the numbers, ExxonMobil is putting serious money where their mouth is. Their 2024 financial results show they’re well-positioned for this investment, with earnings of $33.7 billion [4]. What’s particularly interesting is that about 10% of their capital expenditure is specifically earmarked for emerging lower-emissions markets [1]. They’re expecting their low-carbon business, including hydrogen, to contribute $2 billion in earnings growth by 2030 [1].
Market Impact
As I analyze the situation, this project could significantly impact the hydrogen market. There’s already a commercial agreement in place with Trammo for ammonia sales from the plant [1], and Japanese power producer Jera is considering a substantial 500,000 tonnes per year ammonia offtake [1]. This kind of market response suggests we’re witnessing a crucial moment in the transition to cleaner energy solutions.