Houston Alliance will match abundant green power to next-generation industries on Texas Gulf Coast

By Bryan Fisher, Director of Hubs, Mission Possible Partnership

Ready, Set, Action – a ground-breaking combination of hydrogen power, clean technology and new energy infrastructure are set to transform some of the hardest-to-abate, carbon emissions-intensive industrial sectors in the Houston and extended Gulf Coast area.

This is the green economy matchmaking that the Mission Possible Partnership has been waiting for. After years of careful preparation, we’re grateful for a generous grant over the next two years from the Bezos Earth Fund that enables us to put our industrial decarbonisation strategies to work.

Joining forces with the Houston Energy Transition Initiative (HETI) and Center for Houston’s Future (CHF), we’ll build the business case, develop market opportunities, and work together to tackle the bottlenecks, policy reform and regulatory consents necessary to scale new industrial applications for hydrogen, carbon capture and renewables.

Thanks to game-changing support from the Bezos Earth Fund, this collaboration between HETI and MPP can hit the ground running. We’ll turn insight into near-term action, matching clean and green energy supply with base-load industrial demand in the Houston industrial cluster where supporting infrastructure and policies are already in place.

MPP is an alliance of global leaders in decarbonisation, spanning seven hard-to-abate industries that jointly contribute 30% of today’s carbon emissions. As these plans come to fruition, we’re confident that tomorrow’s decarbonised industries are poised to become economically viable – today.

In the midst of a global energy crisis, when war in Ukraine has exposed both the geopolitical risks, and the systemic fragility inherent in our dependence on fossil fuels, what happens in Houston will be a timely counterpoint.

Hubs are the petri-dish for a more resilient and sustainable energy system. Over the past two years, MPP has published detailed sector transition strategies which define the scale of that task. To date, these sector transition strategies are endorsed by more than 200 industrial companies.

Real-economy milestones

Radical collaboration is bringing to life a critical new generation of decarbonised industries, in the places where conditions are ripe for success. These lighthouse investments will be an example to the next generation of green hubs that are gaining momentum around the world.

At the recent COP27 climate summit in Sharm El-Sheikh, we released 2030 Milestones for seven hard-to-abate sectors, charting the real-economy thresholds for action in this decade that make viable the global goal of net zero emissions by 2050. This is an opportunity for growth and innovation.

Houston and the Gulf Coast is a frontrunner for industrial decarbonisation. This area has about 800 miles of hydrogen pipeline, about half of the US national total. Houston is what I call a molecule town: the industries here know how to move molecules around. So it’s logical to find this area at the forefront of the energy transition, helped by incentives in the recent Inflation Reduction Act that could help make the US the world’s most attractive market for investments in industrial decarbonisation.

Other hubs – from Antwerp to Fujairah, Rotterdam and Singapore – are on a parallel path, a dispersed network of “lighthouses” for the next wave of green hubs. Their signals transmit one shared message: the global goal of net zero emissions by 2050 is still viable, provided we can rapidly scale coordinated action in this decade.

To curb greenhouse gas emissions and stay within 1.5 degree-aligned sectoral carbon budgets, we’ve calculated that by 2030 the world economy needs 300 sustainable aviation fuel plants, 200 zero emissions deep-water vessels (plus fuelling infrastructure), seven million net zero trucks, 100 net zero steel plants, 60 zero emissions ammonia plants, 40 new net zero aluminium facilities, and 20 net zero concrete plants with carbon capture.

We know how to do this

Hubs are where the paper promises of global climate agreements translate into action. Building on our industry-backed plans, we’ll work with local business and community leaders to map a sequenced, operationally relevant development path, asset by asset. Here’s how:

First, integrated project planning.

As a leading matchmaker in this new economy dating game, MPP’s role is to match feedstock suppliers of hydrogen and other renewables - via local infrastructure providers – to large industrial buyers of these fuels and feedstocks.

The appetite for these combinations is already keen. For example, Houston plans to produce 21MT of low emissions hydrogen every year: we’ll match this emerging capacity to cement and steel makers, producers of synthetic aviation fuels or new zero carbon ship fuels like ammonia or methanol, and to charging networks for zero emissions trucking.

Second, understanding demand signals.

We’re analysing a complex web of demand signals through a network that includes First Movers’ Coalition (FMC), Climate Group (with initiatives such as 1.5°C Supply Chain, SteelZero, ConcreteZero), and the Sustainable Aviation Buyers Alliance (SABA).

This data helps companies and communities to build the business case that they need - founded on our sector strategies, calibrated to customer and consumer demands - to sign MOUs with suppliers of hydrogen, renewables, carbon capture and storage for specific and long-term commitments.

On the Texas Gulf Coast, for example, 11 companies are sponsoring 50MT of annual carbon capture capacity. We’re calculating how much of this will be needed for blue hydrogen production and operating processes for ammonia, chemicals, concrete, and steel.

Third, clearing obstacles to investment.

Among the most urgent bottlenecks is the slow pace of consents issued by fragmented regulatory regimes that stall investment decisions. We need to approve 20-30 large projects at a time, every year.

MPP has worked with leading financial institutions to define the principles and tools to fix that, including the World Economic Forum’s Financing the Transition (FFT) initiative for sustainable aviation fuel, and the RMI’s Climate Aligned Finance (CCAF) programme which in 2021 issued the Clydebank Declaration on Shipping at the Glasgow COP 26 climate summit.

In tandem, we’re focused on regulators at local, state, sub-national and national level to design and prioritise urgent reforms to policy and permitting. Speed, scale and consistency are still missing ingredients in our building codes, grants and incentive schemes.

Houston can deploy resources and technology available today

MPP was founded to build the business case for an emerging consensus on what needs to happen in this decade across energy, industry, consumers and communities. Far from waiting on future innovations, we’re focused on scaling technology that is already available, even while new processes develop over the next decade.

Hubs are a critical nexus where best practice travels fast. Examples include direct hydrogen reduction for steel, using hydrogen for fuel cell trucks, making jet fuel from industrial waste, alcohol or biomass, and converting clean hydrogen into green ammonia for net zero shipping fuel.

The commercial opportunity is immense. Could Houston again become a leading steel centre, taking advantage of hydrogen to upgrade existing direct reduction iron (DRI) iron and electric arc furnaces (EAF) to integrated hydrogen DRI-EAF operations with potential for more clean hydrogen and renewables.

With the US poised to become the world’s lowest-cost supplier of green steel, converting these plants to integrated DRI-EAF operations could enable the Gulf Coast region to supply the auto and truck, chemicals and consumer goods industries – a catalyst for wider structural changes.

We’ve seen this work before.

Early successes in Northern California supported rapid expansion of utility-scale solar in the US, then globally, through adoption of a standardized contracting model for power purchase agreements and installation of utility scale solar projects.

Similarly, utility-scale battery installation in South Australia was the touchstone for grid-scale battery storage deployment, triggering a race to secure and scale-up favourable locations elsewhere.

We calculate that two successful hubs on the US West Coast could reduce greenhouse gas emissions by a cumulative one Gigaton of CO2 from 2023-2030. Scaled to a global level, applying our cross-cutting approach to MPP’s seven hard-to abate sectors - aluminium, cement, chemicals and steel, plus aviation, shipping and trucking – implies a 20% reduction (~1GT/annum) in greenhouse gas emissions.

These numbers are impressive and important. But decarbonisation is as much a societal project as it is a still largely untapped opportunity for next-generation industries. Reducing particulate, sulphur and nitrous oxide emissions will improve health outcomes. The same technological advance will clean up local neighbourhoods.

A cleaner, greener global economy heralds a more resilient planet, with substantially improved geo-political and other risks inherent in today’s carbon-intensive energy system. That opportunity for clean growth is coming to the Gulf Coast area, and beyond – to an industrial plant near you.

Bryan Fisher is Director of Hubs at the Mission Possible Partnership, an alliance of leading companies and climate action organisations working to decarbonize seven hard-to-abate industries: Aluminium, Aviation, Chemicals, Concrete, Shipping, Steel and Trucking. Our 2030 Milestones are real-economy targets for action in this decade to achieve net zero emissions by 2050, developed from sector transition strategies endorsed by more than 200 companies. MPP was founded to foster radical collaboration between stakeholders in industry, finance, policy and markets by four partners: Energy Transitions Commission, RMI, We Mean Business Coalition and the World Economic Forum.