Photo courtesy of REUTERS/Jeenah Moon
Exxon Mobil (XOM.N), opens new tab has paused plans to build what would be one of the world’s largest hydrogen production facilities due to weak customer demand, CEO Darren Woods told Reuters in an interview on Friday.
The suspension of the project, which had already experienced delays, reflects a wider slowdown in efforts by traditional oil and gas firms to transition to cleaner energy sources as many of the initiatives struggle to turn a profit.
U.S. President Donald Trump had also yanked funding for green initiatives to focus on fossil fuels.
Oil major Exxon announced plans in 2022 to build the plant at its refining and chemical complex in Baytown, Texas, with a goal of producing 1 billion cubic feet per day of so-called blue hydrogen, a clean fuel that produces water when burned.
Potential customers have stayed on the sidelines due to the higher cost of using hydrogen, Woods said, adding that an industrial slowdown and economic uncertainty in Europe have further crimped demand.
“There’s been a continued challenge to establish committed customers who are willing to provide contracts for off-take,” Woods said.