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us-doe-unveils-700m-for-gulf-coast-clean-hydrogen-based-chemicals-projects
© Grindstone Media Group / Shutterstock
us-doe-unveils-700m-for-gulf-coast-clean-hydrogen-based-chemicals-projects
© Grindstone Media Group / Shutterstock

US DOE unveils $700m for Gulf Coast clean hydrogen-based chemicals projects

Over $700m of US federal funding is being made available for Gulf Coast-based chemical and refining projects to use clean hydrogen in their operations.

Coming as part of a $6bn funding package from the US Department of Energy (DOE), four projects have been selected to negotiate funding for their respective plans that hope to clean up chemical production and refining with low-carbon hydrogen.

Backed by the Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA), US Energy Secretary, Jennifer Granholm, said the investments would “slash emissions” from hard-to-abate sectors.

ExxonMobil could receive up to $331.9m of funding for its Baytown Olefins Plant Carbon Reduction Project, which aims to use hydrogen instead of natural gas across high heat-fired equipment using new burner technologies for ethylene production.

The plant is where the energy giant is looking to establish a 900,000 tonne per year blue hydrogen project which is expected to start production in 2028.

Exxon’s Chief Executive Darren Woods reportedly said last week that the project could be scrapped if it wasn’t eligible for IRA production tax credits.

Read more: JERA looks to buy into Exxon’s Texan mega-scale blue hydrogen project

However, if the project is successful, once fully implemented, the company expects to cut more than 50% of the existing plant’s emissions.

T.EN Stone & Webster Process Technology has also been invited to negotiate up to $200m of funding for its Sustainable Ethylene from CO2 Utilisation with Renewable Energy (SECURE) project on the Gulf Coast.

In partnership with LanzaTech, T.EN plans to demonstrate ethanol and ethylene production through a biotech process using captured CO2 and green hydrogen.

Demark’s Ørsted has also been selected for up to $100m for its Star e-Methanol project which plans to use CO2 and clean hydrogen to produce up to 300,000 tonnes of e-methanol per year on the Texas Gulf Coast.

The project is hoped to prove both supply and demand is there for hydrogen-based fuels in the marine and transportation sectors.

Melissa Peterson, Head of Onshore and P2X Americas at Ørsted, said the production of e-methanol would be “critical” to achieving “rapid decarbonisation” for the most hard-to-electrify sectors.

BASF will also be negotiating up to $75m of funding for its Syngas Production from Recycled Chemical Byproduct Streams project in Freeport, Texas.

With plans to recycle liquid by-products into syngas (carbon monoxide and hydrogen) for use as a feedstock at BAFS’ operations using plasma gasification, BASF expects the technology and renewable power could replace natural gas-fired incineration.

Under the same funding package, the DOE earmarked $1bn for hydrogen-based steel production projects in Mississippi and Ohio.

Read more: $1bn boost for green steel production in Mississippi and Ohio

What are the hard-to-abate sectors?

From the first steps forward in industrialisation and the use of steam power – the first Industrial Revolution – we’ve been building, perfecting and deeply embedding an industrial, societal and economic tree based upon fossil fuels.

Often traced as far back as 1760 in its first instances, through to circa 1820-1840, the Industrial Revolution is widely considered a major turning point in history and material advancement. Europe was at the heart of this revolution in the 18th and 19th century, as the transformation to new (steam) power sources, newly mechanised manufacturing processes and whole new ways of life and industry emerged.

It was a transition that saw mankind not only move from hand production methods to machines, but discover and embrace new chemical manufacturing and iron production processes, as well as the increasing use of steam and water power. Mechanised factory systems came to the fore; output greatly increased; the textiles sector was the first to use these modern manufacturing methods and became dominant industry in terms of employment, value of output and capital invested; while the rate of population growth also exploded.

This was a true boom time, a revolution that dramatically changed the way we lived, worked and utilised our Earth’s resources – and we have only added layer upon intricate and ingenious layer of industrial and societal advancement ever since. It stands to reason that in 2022, over 200 years later, we have an interwoven cross-section of so-called hard-to-abate sectors – the energy-intensive industries (EIIs) that produce basic materials and are responsible for over 20% of global CO2 (carbon dioxide) emissions, depending on your source. These are emissions that only continue to increase as the world develops, populations proliferate and the demand for basic materials rapidly expands as a result…

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