ExxonMobil halts blue hydrogen project due to offtake issues

US firm ExxonMobil has put to a stop its plans for a blue hydrogen production plant in Texas, US, according to a Reuters report. CEO Darren Woods has been quoted as having said that the company has been struggling to secure sufficient offtake from the 1 billion cu ft/day plant, which had been targeting start-up in 2027-2028.

Launched in 2022, the project was intended to be developed within Exxon’s Baytown refining and chemicals complex in Texas 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 Jera and Mitsubishi said they were exploring deals for buy volumes.

Air Liquide also announced it would transport the Baytown-made hydrogen through its existing pipeline network along the US Gulf Coast.

However, the project had been facing increasing delays and uncertainty over the past year.

In August, CEO Woods warned the shortened timeline 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 offtakes for the project..

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.

With question marks already lingering over other developments, like Air Products’ Louisiana blue hydrogen plant, this move may further weigh on market confidence.