A Report for the 89th Texas Legislature by the Texas Hydrogen Production Policy Council
In 2023, the Texas Legislature created the Texas Hydrogen Production Policy Council (Council) to study and make recommendations relating to the policy framework of the Railroad Commission of Texas for hydrogen energy development in Texas. The Council was established in December 2023 pursuant to House Bill 2847 (88th Legislature, Regular Session), and its initial report details the Council’s analysis and preliminary recommendations. The report’s recommendations are focused on ensuring effective and consistent regulatory oversight of hydrogen production, transportation, and storage, while maximizing economic opportunities for the development of the hydrogen industry in Texas.
Executive Summary
Texas is at the center of the world’s energy industry, with an unparalleled combination of natural resources, infrastructure and human capital. These systemic advantages, developed over many decades, allow Texas to help meet the world’s energy needs reliably, cost effectively, and at-scale. As the world’s energy needs continue to expand, and as demand grows for clean1 forms of energy, hydrogen has come into focus as one of the critical energy currencies of the future. As a global leader in conventional hydrogen production, Texas is well-positioned to maintain and expand its leadership as the hydrogen industry prepares for exponential growth over the coming decades.
The analysis and recommendations in this report are not exhaustive but are intended to present the next steps required to bolster Texas’ national and global leadership in the hydrogen industry. Prudent regulation and guidance from the state government will allow Texas to capitalize on the economic and environmental opportunity in a safe and responsible way. Statutorily, the Council is planned to continue until January 1, 2030. Consequently, the recommendations and actions taken by the Council are expected to be continuously reviewed and modified as technologies, markets, and the regulatory landscape evolve.
In the first section, Regulatory Oversight, the Council summarizes the existing state and federal regulatory landscape governing safety, permitting, and environmental compliance across the hydrogen value chain. The Council’s analysis of this regulatory landscape identifies areas with current oversight and areas wherein gaps may create the potential for improvement. While considering recommendations for change, the Council focused on:
- Safety: Confirming that existing statutes and rules ensure the safety of personnel working in the hydrogen industry, as well as the safety of the communities living in proximity to its infrastructure.
- Environmental Protection: Confirming that existing statutes and rules ensure the stewardship of Texas’ natural resources and the protection of the environment.
- Regulatory Clarity and Efficiency: Ensuring that participants in the hydrogen industry face clear, consistent, and predictable regulatory requirements, while minimizing jurisdictional gaps or overlap.
In the second section, Maximizing the Economic Opportunity for Texas, the Council summarizes its study of the developing hydrogen industry. This analysis considers the potential economic opportunity presented by the hydrogen industry in Texas, evaluates the critical enablers of hydrogen industry development, and provides recommendations to remove barriers and accelerate this development in Texas. For ease of understanding, the Council has utilized the commonly labeled hydrogen production colors of hydrogen throughout the report. As discussed further in Appendix I, the Council recognizes that the more important focus should be on the carbon intensity (and not “color”) of hydrogen. Colors refer to the many methods used to produce hydrogen (fuels, feedstocks and technologies), whereas “carbon intensity” refers to the resulting greenhouse gas emissions associated with the hydrogen produced, irrespective of method.
Download the full report here.