Evaluating Net-Zero Industrial Hubs in the United States: A Case Study of Houston
- Lead PI: Julio Friedmann, Mahak Agrawal, Amar Bhardwaj
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Unit Affiliation: Center on Global Energy Policy (CGEP)
- June 2021 - Ongoing
- Active
- North America ; Texas
- Project Type: Research Outreach Education
DESCRIPTION:
New legislation, corporate action, and public interest have created both an imperative and opportunities associated with rapid and profound CO2 reduction and removal. Net-zero industrial hubs present a pathway to focus investment, innovation, and public policy to create industries and infrastructure toward achieving that goal. Such a hub would require building facilities, plants, and linked infrastructure that would reduce and eventually eliminate greenhouse gas emissions through the application of advanced clean energy, emissions control technology, and possibly CO2 removal technology. This concept, while relatively new, has already gained interest from some nations and companies, most notably in the United Kingdom around net-zero hubs like the Teesside collective.
This paper, part of the work from the Carbon Management Research Initiative of Columbia University’s Center on Global Energy Policy, examines Houston as a potential net-zero hub location. Houston, a major US refining and petrochemical center, possesses a high concentration of industrial sites and fossil-fueled power plants. Regional CO2 storage capacity, low-cost energy, infrastructure like the Port of Houston, and a large skilled labor pool also suggest a possible opportunity for investment, trade, and greenhouse gas reduction in this area. The paper also makes recommendations for policy makers should they seek to pursue a net-zero hub in the Houston area.
Key findings of the paper include the following:
Infrastructure development is a core feature of net-zero hubs. The authors estimate the possible costs of green hydrogen infrastructure (electolyzers), CO2 capture infrastructure, new renewable power supplies and transmission, and an ammonia export terminal in Houston will require an initial investment of about $28 billion for 25 million tons per year of annual emissions reduction capacity.
Based on studies of similar industrial sites, this amount could involve a combination of public and private funds. A competitive federal granting program on the order of $1.5–$2.5 billion of government funding per net-zero hub could attract the private capital needed for development. In order to accelerate investment and reduce risk of failure, the competitive program could be paired with market-aligning incentives such as a hydrogen production tax credit or augmented 45Q.
Ultimately, developing a net-zero hub and achieving deep CO2 emissions reductions would likely require a combination of civic and corporate leadership, regional cooperation across sectors, and community engagement. Efforts could include a deliberate focus on equity and environmental justice, including platforms for community involvement, with a focus on creating local benefits.