Abu Dhabi National Oil Co. (Adnoc) has agreed to acquire a 35% stake in Exxon Mobil Corp.'s hydrogen project in Baytown, Texas, which is expected to become the largest hydrogen project globally. The backing from Adnoc signifies strong momentum behind the project, which aims to produce 1 billion cubic feet of hydrogen per day and 1 million tons of ammonia annually. The project, initially planned for startup in 2029, faced delays due to disagreements with the Biden administration over tax credits under the Inflation Reduction Act. Hydrogen plays a crucial role in Exxon's low-carbon strategy, leveraging existing infrastructure like refineries and pipelines to decarbonize heavy industry and produce ammonia for fertilizer or fuel. Despite the potential benefits, large hydrogen projects globally have faced challenges due to a lack of customers. Adnoc's involvement marks the third major industrial partnership for Exxon's project, with JERA Co. and Air Liquide SA also on board. Adnoc's executive vice president, Michele Fiorentino, highlighted the project's aim to develop blue hydrogen supply capabilities in cost-competitive regions such as Adnoc's base in the Persian Gulf and the US. The project will provide hydrogen for local use and ammonia for export. This venture follows Adnoc's previous investment in a US LNG export project, as part of the UAE's efforts to adopt hydrogen and carbon capture technologies to reduce emissions while sustaining hydrocarbon sales to emerging industries. The main challenge for the Texas facility remains the government's 45V tax credit, primarily designated for projects producing green hydrogen from water and renewable energy sources. Despite Exxon's plant producing blue hydrogen from natural gas, executives believe it should qualify for the tax credits due to an accompanying carbon capture project that would eliminate 98% of emissions. The project aims to align with policies supporting carbon intensity reduction regardless of the technology used.