Abu Dhabi National Oil Co. has agreed to acquire a 35% stake in Exxon Mobil Corp.'s ambitious hydrogen project located in Baytown, Texas. This partnership is set to make the project the largest of its kind globally upon completion. Despite the initial planned start-up date in 2028, the project's timeline has been pushed back to 2029, partly due to a dispute with the Biden administration concerning whether the facility qualifies for tax credits under the Inflation Reduction Act. The project focuses on producing 1 billion cubic feet of hydrogen and 1 million tons of ammonia annually, aiming to leverage existing infrastructure for decarbonizing heavy industry and producing ammonia for various applications. Adnoc's involvement marks a significant step forward for the project, following agreements with other major partners like JERA Co. and Air Liquide SA. The main challenge facing the Texas facility is the eligibility for the government's 45V tax credit, designed for projects generating green hydrogen from water and renewable energy sources. Exxon's plant, however, will produce blue hydrogen from natural gas, resulting in carbon dioxide emissions. Despite this, Exxon executives are optimistic that the project should qualify for tax credits as an accompanying carbon capture initiative aims to eliminate 98% of these emissions. This aligns with UAE's strategic shift towards cleaner technologies like hydrogen and carbon capture to reduce emissions while still maintaining its position in the hydrocarbon market. The project's success could pave the way for more large-scale hydrogen initiatives globally, emphasizing the importance of technology-agnostic policies and incentives to drive the energy transition towards lower carbon intensity.