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Report: Houston Region Poised to Become a Global Clean Hydrogen Hub

Published May 23, 2022 by Laura Goldberg


With the U.S. Department of Energy set to announce plans for $8 billion in funding for clean hydrogen hubs across the country, a new report finds that Houston, long considered the “Energy Capital of the World,” is well positioned to leverage Texas’ vast energy resources to become a global clean hydrogen hub.

These energy resources include existing hydrogen production facilities and pipelines along the Gulf Coast, a base of large, sophisticated industrial energy consumers, and renewable energy assets across the state.

The report, released today by the Center for Houston’s Future, Houston as the epicenter of a global clean hydrogen hub, lays out how these assets can be leveraged to create a global clean hydrogen hub.

Find the report here.

Inspired by the unprecedented opportunity for Houston to lead the energy transition to a lowcarbon future, the report contains the most detailed assessment to date of the economic potential and environmental impact of clean hydrogen.

The report explains how clean hydrogen can be produced by adding carbon capture to current natural gas-based hydrogen plants or through electrolysis (the process that splits water into hydrogen and oxygen). Using these methods, the report shows how clean hydrogen can be an important tool in addressing climate change and reducing industrial emissions while creating high-paying jobs.

Clean hydrogen hubs are expected to emerge in regions where there is sufficient clean hydrogen supply and demand. Since the Houston region produces and consumes a third of the nation’s hydrogen and has more than 50 percent of the country’s dedicated hydrogen pipelines, the report provides a roadmap for how these assets can be utilized to accelerate a transition to clean hydrogen.

The report was created as part of the Greater Houston Partnership’s Houston Energy Transition Initiative, with input from more than 100 experts representing 70 companies and organizations along the hydrogen value chain. In addition, McKinsey and Company donated significant research and economic analyses for the report.

Among the findings in the study:

  • Clean hydrogen production could grow 5x over current hydrogen production by 2050.
  • The establishment of a clean hydrogen industry could create 180,000 jobs (direct, indirect and induced) statewide, while adding $100 billion to Texas' GDP growth.
  • Globally, a Houston-led clean hydrogen hub could abate 220 million tons (MT) tons of carbon emissions by 2050.

“This report gives additional weight to the already strong case that Houston is uniquely positioned to lead a transformational clean hydrogen hub with global impact,” said Houston Mayor Sylvester Turner. “We can also deliver economic growth, create jobs and cut emissions across Houston and the Gulf Coast, including in underserved communities.”

Governments worldwide are looking to clean hydrogen to help meet net-zero carbon emission goals. In the U.S., the Department of Energy says clean hydrogen is crucial to President Biden’s goals for a 100% clean electrical grid by 2035 and of net-zero carbon emissions by 2050.

“The Houston region has the talent, expertise and infrastructure needed to lead the global energy transition to a low-carbon world. Clean hydrogen, alongside carbon capture, use, and storage are among the key technology areas where Houston is set up to succeed and can be an example to other leading energy economies around the world,” said Bobby Tudor, chair of the Greater Houston Partnership’s Houston Energy Transition Initiative.

The report describes a vision for how the hub could hit the ambitious cost targets proposed by the DOE in its recent Energy Earthshot initiative and meet strict emissions goals set out by Congress in the Bipartisan Infrastructure Law. The report discusses how achieving outcomes that support environmental justice, create good jobs, and incentivize US-based manufacturing are core to the vision of a successful clean hydrogen hub in the region.

"Using this roadmap as a guide and with Houston’s energy sector at the lead, we are ready to create a new clean hydrogen economy that will help fight climate change as it creates jobs and economic growth,” said Center for Houston’s Future CEO Brett Perlman. “We are more than ready, able and willing to take on these goals, as our record of overwhelming success in energy innovation and new market development shows.”

Selected key findings follow.

Vision and strategic roadmap

  • The proposed 2050 vision could have massive impact on climate, jobs, and the economy, including an estimated 220 MT of global CO2 abatement, $100 billion in economic value, and the creation of 180,000 jobs.
  • With the right policy framework, the hub could become the global leader in clean hydrogen production, application, development, and exports.


  • Global demand for clean hydrogen is limited today, but we expect it to grow 6-8% each year on average between 2030-50. Hydrogen is expected to play a critical role in decarbonizing sectors such as industry, mobility, and power – potentially addressing 660 MT of demand by 2050, according to the Hydrogen Council.
  • Demand for clean hydrogen in Texas alone could reach 21 MT by 2050 – vs. current demand of 3.6 MT for conventionally produced hydrogen. The expected demand in 2050 comprises 11 MT for local demand and a surplus of 10 MT for export.
    • Export of hydrogen and hydrogen-based fuels is the largest driver of the increase, contributing ~10 MT of hydrogen demand.
    • Industrial applications are the second largest driver, with feedstock and heating in sectors such as refining, petrochemicals, ammonia, iron and steel, and cement accounting for ~6 MT of hydrogen demand.
    • Mobility, with ground transportation (trucks, light commercial vehicles, and buses) accounting for ~2.3 MT of hydrogen demand and marine and aviation accounting for ~1.5 MT of hydrogen and hydrogen-based fuel demand.
    • Utility power generation, with energy storage and local grid natural gas blending accounting for ~1.6 MT of hydrogen demand.


  • Clean hydrogen production costs for both electrolysis-based and natural gas-based hydrogen are expected to drop substantially. The estimated cost of producing natural gasbased hydrogen with carbon capture and storage in 2030 could meet the DOE’s goal of $1/kg of clean hydrogen. Electrolysis-based hydrogen could be reduced to as low as $1.5/kg by 2030 but will need further government support to hit the Department of Energy’s target.
  • The region has natural advantages in developing cost-effective hydrogen transport and storage, given extensive oil and gas and hydrogen pipelines, experience in hydrogen storage, salt caverns, and port infrastructure.
  • The Texas Gulf Coast is positioned to be the hydrogen export hub of the U.S., given our ability to compete with potential major exporters (e.g., Australia, Chile, and Saudi Arabia) on the delivered cost of hydrogen. Strategic considerations including security and reliability also provide advantages.

Impact of the Hub Across the Region and the State

  • As the clean hydrogen ecosystem develops, we can see a variety of projects addressing supply, demand, and infrastructure spreading across the region, with concentrations in areas around Greater Houston, Corpus Christi and South Texas, Baton Rouge and New Orleans, Beaumont and East Texas, and extending to Dallas and the Texas Triangle, as well as West Texas.

Cross-cutting enablers

  • Government commitments, direct incentives, and regulatory frameworks are among the major policy instruments for decreasing cost and increasing demand. In addition to federal policies, Texas and Louisiana should implement state-level policies to accelerate progress on the 2050 vision. More work is needed to flesh out appropriate options.
  • Scaling hydrogen requires developing infrastructure, including hydrogen transport and storage, fueling stations, CO2 transport and storage, water purification and transportation, electricity transmission, port infrastructure, and a mature supply chain for critical materials.
  • The hub would benefit from a vibrant innovation ecosystem, including a research consortium that fosters collaboration across institutional lines, a start-up network that leverages existing assets and demand in the region, a testing facility to scale and commercialize new technologies, and local equipment manufacturing
  • Meeting the hub’s talent needs requires equitable workforce development programs. Community colleges, institutions of higher education, and companies could all play key roles in training a hydrogen economy workforce.
  • The next phase of this work will focus on creating a demand-centric roadmap for 2022 through 2030. Our team will also explore hub funding requirements, sector-specific legal and regulatory unlocks, and ways to build the right coalition for an integrated effort to develop the hydrogen hub. Collectively, these actions will create the blueprint for Houston – as the energy capital of the world – and the Gulf Coast to lead the transition to clean hydrogen.

“By working together now, government, industry and community leaders can make a significant impact at home and across the world that will be felt for years to come,” Perlman said.

Learn more about the Center for Houston's Future and its work in hydrogen as well as the Partnership and HETI

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Key Takeaways from Future of Global Energy Virtual Sessions

The Partnership's Houston Energy Transition Initiative and the Center for Houston's Future held the three-day Future of Global Energy conference presented by Chevron in late June. The final day of the annual conference included virtual sessions featuring nearly 40 leaders in industry, academia and public interest organizations sharing insights on the changing energy landscape through a global and national lens. Panelists also highlighted Houston's achievements and the opportunity to lead the transition to an energy-abundant, low-carbon world. Below is an overview of what these leaders shared related to carbon capture, use and storage, decarbonization, hydrogen and climate equity. CCUS - Sponsored by Sempra Carbon Capture, Utilization and Sequestration (CCUS) is an integral element of the energy transition, and more and more projects are coming online around the world. This track focused on understanding the CCUS landscape both domestically and internationally, the important role technologies like CCUS play in helping Houston meet its low carbon goals and support global decarbonization, and over the horizon technologies and applications expected in CCUS through the energy transition.   Session 1, "Global & National Context: What is Happening in CCUS Around the World," began with how North America is leading the way in CCUS project development, and why project activity is increasing in Australia and Europe. Texas alone has 8 projects with projected capital expenditures of $102 billion. A key point of CCUS is that it enables carbon mitigation because storage and transport of CO2 are source-agnostic, enabling implementation across the energy sector. Keynote speaker, Sallie Greenberg, provided an overview of the DOE's CarbonSAFE program and discussed how hubs are emerging as the infrastructure of the future, both in carbon storage and clean hydrogen production. The federal tax credit 45Q has a "steel in the ground" construction date of January, 2026, making CCUS enabling policies all the more important. The number of projects globally will need to double to meet 2030 emissions reductions targets. Speakers: Sallie Greenberg, Principal Research Scientist of Energy & Minerals – Illinois State Geological Survey, University of Illinois Moderator: Amanda Duhon, Director, EIC North & Central America, Energy Industries Council The second session, "CCS in the Houston Region: Challenges and Opportunities for Deployment," highlighted many opportunities in metro Houston. There are immense geological assets in the region that position Houston to lead CCS deployment. In addition, there are significant input sources of CO2 from refineries, petrochemical plants and other sources along the Gulf Coast along with assets and infrastructure in place to offtake and store CO2. The talent, knowledge and expertise to commercialize CCS at scale exists in Houston like no other place. Houston has the opportunity to be the epicenter of CCS, even though the technology will be widely deployed globally.  However, there are challenges to deployment.  First, there is the need to drive down the cost of carbon capture technology.  The cost of capture increases as the stream of carbon dioxide becomes more dilute, particularly in certain applications like direct air capture.  Also, although new projects have been announced in North America and along the Gulf Coast, development of these projects will require capacity at the state and federal level to approve Class VI permits and a durable regulatory framework to reduce uncertainty in investments, including addressing long-term legal liability. Speakers: Frederick Eames, Partner, Hunton Andrews Kurth LLP Ed Graham, Vice President – Ventures, ExxonMobil Low Carbon Solutions Chris Powers, Vice President – CCUS, Chevron New Energies  Todd Thornton, Senior Vice President, Origination and Development, Calpine Moderator: Patrick Johnson, Partner, Bracewell LLP Session 3, "What’s Next in CCUS: Innovations in Technologies Across the Supply Chain," discussed the importance of new technologies that are nearing commercialization and how these technology advances can help to educate regulators, investors and users on how to scale CCUS. Other key takeaways from this session included a discussion on the importance of the 45Q tax credit and its role in providing long-term value stream to develop CCS projects. In the near-term, tax equity, legal, regulatory and other measures are extremely important in the economics of  CCS projects. Also highlighted was the importance of effectively engaging stakeholders to put a project into action. Panelists agreed on the need for mega-projects in CCS while also underscoring the importance of smaller projects that can prove technologies, demonstrate the safety and reliability of technologies and provide a stepping stone to mega-projects in the future.  Finally, the panel discussed the importance of utilization as a means to bring carbon capture to scale and underscored that CO2 needs to have a value to make projects more economic. Houston and the Gulf Coast region need to show an ability to permit and manage CO2 transport and storage safely to demonstrate the important role of CCUS in achieving an energy abundant, low-carbon future. Speakers: David Bahr, Director - Decarbonization, Wood Ashleigh Ross, Vice President, Commercial Development and Strategy, Carbon America Richard Tomaski, Director - Project Development, Sempra Infrastructure  Moderator: Clint Wood, Partner, McKinsey Decarbonization Track - Sponsored by Accenture The Decarbonization Track showcased digital solutions being developed right here in Houston to help reduce emissions across the supply chain. We learned that energy operators are leveraging their expertise to implement solutions that will reduce the emissions from operations and the carbon intensity of oil and gas produced. Exploration and production are highly technical activities, and accurately measuring CO2 emissions from operations and production is becoming increasingly important. Digital solutions are becoming increasingly important to the energy transition. This panel and sessions discussed the technologies companies are currently utilizing to lower operational emissions, the ways companies utilize technology, like drones, AI, and the like, to measure, monitor and mitigate carbon emissions and showcase how digital solutions can be deployed from wellhead to consumer. The first session, "Decarbonizing Oil & Gas Operations: It’s Not Business as Usual," described the importance of carbon baselining for enterprise-level emissions monitoring, identifying value-adding opportunities, and prioritizing solutions for sustainable emissions reductions across global operations. Integrated oil and gas companies know how to run complex projects and tackle full life cycle challenges with commitments to sustainability, reliability, innovation, and efficiency at every level. A key take-away from this session focused on leveraging relationships within the energy sector and beyond and the importance of developing holistic solutions at a scale that can simultaneously lift millions of people out of poverty and provide a return on investment. Speakers included Peter Evans, Vice President, Subsurface, Gulf of Mexico & Canada, bp America; Dan Farler, Vice President, Engineering & Projects, Hess Midstream; Jack Stout, Vice President, Growth and Development, Applied Intelligence, Wood; and moderator, Stephanie Rogers, Managing Director, Resources, Accenture. Speakers: Peter Evans, Vice President – Subsurface, Gulf of Mexico & Canada, bp America Dan Farler, Vice President – Engineering & Projects, Hess Midstream  Jack Stout, Vice President, Growth and Development – Applied Intelligence, Wood  Moderator: Stephanie Rogers, Managing Director, Resources, Accenture  In session 2, "Measuring and Managing Emissions in the Energy Industry," we learned about a wave of activity in the voluntary markets for sustainably-sourced crude oil and natural gas driven by investor and customer expectations. First movers are driving ROI by leveraging emissions management and continuous monitoring technologies in assets across energy supply chain and the combinations of digital, technology and capital required are all critical. Accurately reporting on emissions quantification and reduction actions is one of the smartest things that companies can focus on presently.  Risk and uncertainty in compliance and reporting lead to fear over accuracy of the final disclosures - which is the most critical aspect to understand exactly how technologies are impacting a firm's disclosures. Driving alignment between technical emissions management approaches and corporate sustainability reporting with robust data and quality control, integration across operations and third party validation for calculations and disclosures is necessary to ensure accurate and fact-based reporting that is consistent with a company's culture and values. This session emphasized the importance for companies to evolve from monitoring, detecting and measuring emissions and leaks to addressing emissions across their portfolios with forecasting and actions to drive emissions prevention, reduction, and optimization.  Speakers from this session included Sacha Abinader, Managing Director, Strategy & Consulting, Accenture; Kayla Ball, Chief Product Officer, Valider; Anne Carpenter, Partner, Baker Botts; and moderator, Nick Fulford, Senior Director – Energy Transition, Gaffney Cline. Speakers: Sacha Abinader, Managing Director, Strategy & Consulting, Accenture  Kayla Ball, Chief Product Officer, Validere Anne Carpenter, Partner, Baker Botts Moderator: Nick Fulford, Senior Director – Energy Transition, Gaffney Cline  In the last session for this track, "Innovation in Decarbonization: Houston Based Startups Discuss the Landscape of Digital Solutions for Emissions Reduction Across the Supply Chain," panelists shared that emissions reduction is the path to the future and that companies have to continue to run their operations while developing their emissions reductions plans to decarbonize and create transparency throughout the complex supply chain and technology ecosystems. Decarbonization is about all options, and startups play a critical role in helping companies figure out the right decarbonization problems to solve. Startups need access to energy companies for capital and facilities for demonstration and pilot projects to develop at scale and create broad-scale solutions. Collisions that occur among energy majors, infrastructure companies and workforce in Houston are driving innovation in decarbonization. The session highlighted the conservative approach of traditional energy companies and the important role partnerships with startups and entrepreneurs will play in developing new solutions. 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This track discussed the issues that need to be addressed to successfully launch U.S. hydrogen markets, explored Houston’s advantages and challenges in developing a global clean hydrogen hub and shared what is on the horizon for clean hydrogen and how these technologies might disrupt the landscape.  The first session, "Hydrogen Hubs," began with insight into Greater Houston’s resources, including a large industrial demand for hydrogen, export potential through the Port and existing energy infrastructure, and how this will help Houston scale as a clean hydrogen hub. Other highlights from the session included Houston’s ability to match industrial consumers with hydrogen demand, to a consistent hydrogen supply with feedstock diversity and how this is integral for the successful, long-term development of a hydrogen hub. Policymakers must accelerate the speed of permitting for large-scale, low-carbon energy projects, including the pieces needed for Houston’s clean hydrogen hub, so hubs can scale more quickly and thrive.     Speakers: Matt Rogers, CEO, Mission Possible Partnership  Moderator: Amy Chronis, Vice Chair, Houston Managing Partner, Deloitte   The second session, “Houston Hydrogen Hub Update,” provided information on Houston’s access to existing energy infrastructure – including pipelines, transmission and various modes of transportation – as well as an existing skilled energy industry workforce, innovations from academic institutions and access to renewable energy resources will aid in the development of Houston’s hydrogen hub. Panelists also emphasized that collaboration among stakeholders in Houston is integral and those involved must find shared objectives to fully take advantage of opportunities for hydrogen in Houston. The lack of state-level subsidies has the potential to hinder the development of a regional clean hydrogen hub. Implementing such policies would accelerate progress and support competitiveness.  Speakers: Paul Browning, President & Chief Executive Officer, North America, Fortescue Future Industries Georgios Plevrakis, Vice President of Global Sustainability, ABS Kristine Wiley, Vice President, Hydrogen Technology Center, GTI Energy  Moderator: Geoff Tuff, Principal, Deloitte Consulting LLP   The last topic in the Hydrogen track, "Next Generation of Hydrogen Technology Development," discussed what's on the horizon for clean hydrogen and how these technologies might disrupt the landscape. Unconventional, “disruptive” technologies will help further accelerate the expansion of hydrogen and other low-carbon energy sources. Panelist Madhav Acharya, vice president of commercialization at Syzygy Plasmonics, highlighted its technology, which can convert traditional catalysts used in the chemical industry into high-performance photocatalysts energized by light instead of heat. Panelist Elina Teplinsky Winthrop, partner at Pillsbury Winthrop Shaw Pittman LLP, emphasized the use of nuclear technology in producing hydrogen, particularly with small modular reactors that are less capital intensive and can be located at industrial sites. Panelist Matteo Pasquali, director of Rice University’s Carbon Hub, highlighted techniques to take advantage of byproducts that can result when producing hydrogen. Carbon black, for example, can be turned into useful materials. He cited the Monolith factory in Nebraska that will use electricity to make 180,000 tons of carbon black and 60,000 tons of hydrogen per year, without CO2 emissions.  Speakers: Madhav Acharya, Vice President – Commercialization, Syzygy Plasmonics  Matteo Pasquali, Director, Carbon Hub, Rice University  Elina Teplinsky Winthrop, Partner, Pillsbury Moderator: Shari Boyd, Senior Manager, Deloitte Climate Equity Track A successful energy transition goes beyond emissions reductions – it will drive our economy, create new jobs, and improve the quality of life for all Houstonians. This panel explored how the transition can and must provide equitable opportunities for Houston’s workforce and communities and here are a few of the biggest takeaways from the last virtual session. The City of Houston made two major announcements this past April on Earth Day. One focused on TCEQ-approval of the Sunnyside Solar Farm project that will convert a 240-acre landfill into the nation’s largest urban solar farm. The second was the launch of the City’s new Building Decarbonization Policy that will guide the decarbonization of the city’s portfolio of existing and future buildings. City of Houston Chief Resiliency and Sustainability Officer Priya Zachariah discussed the need to scale the effort to the private sector with wide-ranging messaging and a sense of urgency.  There is a significant amount of funding flowing from the federal government for job training, community college and other programs to prepare workers for jobs in needed fields. But the challenge is connecting with those would-be students—particularly in minority communities—through outreach activations in churches and other community organizations. “We have to be intentional about finding diverse students where they are if we’re going to succeed in obtaining the diverse talent that we need,” said Mark Crawford, Senior Vice President of Group Diversity and Inclusion at bp America.  Public-private partnerships are working effectively right now to ensure equity is part of the energy transition conversation. Such partnerships between institutions of higher education, community groups, business and others is a blueprint for developing more solutions but we must be intentional as a community to ensure the most vulnerable are not left behind. 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