ExxonMobil pauses plans for $7B hydrogen plant in Baytown

ExxonMobil has paused its planned $7 billion low-carbon hydrogen plant in Baytown, Chairman and CEO Darren Woods told Reuters. The project had already been delayed and reflects a broader slowdown in oil-and-gas companies’ energy-transition efforts, which are struggling to become profitable. A key issue is the shift from the Biden-era 45V hydrogen tax credit timeline to the accelerated 2028 construction deadline under President Trump’s One Big Beautiful Bill Act. Although ExxonMobil could meet the new timeline, Woods said the company is worried about whether a real, long-term market for low-carbon hydrogen will develop beyond government incentives. The company has been evaluating whether combining the 45Q carbon-capture credit with the revised 45V hydrogen credit could make the project viable. Woods emphasized that ExxonMobil will not proceed without a clear path to a market-driven business. Announced in 2022, the Baytown plant was expected to start producing in 2027, generating up to 1 billion cubic feet of hydrogen per day while capturing 98% of associated CO₂—up to 10 million metric tons annually.