Allentown, Pa.-based industrial gas supplier Air Products and Chemicals and Arlington, Va., power utility company AES Corp. announced plans to jointly spend $4 billion on a “mega-scale” green hydrogen plant they would build in north Texas.

The Wilbarger County facility would be the largest in the U.S. to manufacture green hydrogen, with electrolyzers able to produce more than 220 tons per day, the companies say. The plant would also include on-site wind and solar power generation with an installed capacity of about 1.4 GW.

Construction of the plant would involve more than 1,300 construction jobs, say the companies, which did not disclose whether they had selected a builder, and representatives did not immediately respond to ENR queries

The plant is expected to begin commercial operation in 2027 to serve industrial and heavy duty transportation markets, according to Air Products. 

Seifi Ghasemi, its chairman, president and CEO, told investors on a Dec. 8 earnings call that the companies had discussed the project for several years, but that Inflation Reduction Act incentives played a role in making the project feasible now.

As ENR previously reported, tax credits in the law signed in August by President Joe Biden, are expected to lower costs of green hydrogen production on par with hydrogen produced using fossil fuels in ways that do not capture greenhouse gases. Ghasemi said the Air Products-AES plant stands to benefit from additional tax credits for its use of on-site renewable energy.

The new law's incentives "make it more attractive now to build and invest in the United States in green hydrogen and blue hydrogen,” Ghasemi said.

The project comes as forecasters are predicting a rise in global demand for hydrogen, which reached its highest level yet in 2021, about 103 million tons, according to the International Energy Agency. But low-emissions hydrogen has accounted for less than 1% of production over the past three years. The energy agency projects that low-emission hydrogen could meet 25% of rising hydrogen demand by 2030.

Use of green hydrogen from this project could prevent emissions over its lifetime equivalent to that of nearly 5 billion gallons of diesel fuel, according to Air Products and AES.

The utility firm "believes that green hydrogen has a key role to play in decarbonizing transportation and accelerating the future of energy,” said Andrés Gluski, its president and CEO, in a statement.