hi to hydrogen

Houston clean fuels producer reaches milestone on South Texas hydrogen-powered refinery

Element Fuels has designed the plant to produce and recycle hydrogen that will generate and deliver cleaner, higher-quality fuels. Photo via Getty Images

Houston-based Element Fuels has completed the pre-construction phase of its hydrogen-powered clean fuels refinery and combined-cycle power plant in the Port of Brownsville.

Element Fuels, which has contracted with Houston-based McDermott to provide front-end engineering design services for the project, has designed the plant to produce and recycle hydrogen that will generate and deliver cleaner, higher-quality fuels, including much-needed high-octane gasoline and electricity for commercial and consumer consumption.

“Element Fuels has received the necessary permitting to construct and operate a refinery capable of producing in excess of 160,000 barrels, or approximately 6.7 million gallons, per day of finished gasoline, diesel, and jet fuel,” Founder and Co-CEO of Element Fuels John Calce says in a news release. “A permit for a greenfield refinery of this size, scope, and functionality has not been granted in the United States since the 1970s. This speaks to the innovative approaches we are taking to address climate and sustainability concerns in cleaner, greener ways that are new to the refinery space.”

The project is expected to go online in 2027 and will produce enough low-carbon hydrogen to supply approximately 100 percent of the refinery’s fuel requirements, essentially eliminating CO2 emissions, per the news release. More than 100 megawatts of excess electricity generated from the power plant will be provided to the Energy Reliability Council of Texas for the surrounding community’s needs.

“Element Fuels is not only ushering in the next generation of clean fuels, we’re also proving that, without a doubt, there is a way to produce higher quality, cleaner, higher-octane fuels that significantly advance the energy transition," Calce continues. "This changes everything – for the industry, for consumers, and for the well-being of the planet.”

The plant is located in South Texas and built on more than 240 acres within the Port of Brownsville. Element Fuels is reportedly collaborating with local and Port officials "to advance the Justice40 initiative established by the U.S. Department of Commerce to contribute to a climate-positive environment that provides residents of the Brownsville area and Rio Grande Valley with clean energy and affordable and sustainable housing," per the release.

“Building on our successful collaboration during early project phases, we believe we are uniquely positioned to leverage our expertise and knowledge to further support Element Fuels throughout the next stages of this unique project,” adds Rob Shaul, senior vice president at Low Carbon Solutions at McDermott. “We remain focused on the delivery of low carbon pathway projects and are committed to advancing the landscape of energy production.”

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A View From HETI

Houston's data center scene has received its latest bullish forecast. Photo via serverfarmllc.com

The Houston market could more than double its data center capacity by the end of 2028, a new report indicates.

The report, published by commercial real estate services provider CBRE, says greater demand for data center capacity in the Houston area is being fueled by energy companies, along with large-scale cloud services and AI-driven tenants.

In the second half of 2025, the Houston market had 154 megawatts of data center capacity, which was on par with capacity in the second half of 2024. Another 28.5 megawatts of capacity was under construction during that period.

“Multiple providers are advancing new builds and redevelopments, including significant power upgrades to recently purchased buildings, underscoring long-term confidence even as the market works through elevated vacancy and uneven absorption,” CBRE says of Houston’s data center presence.

One project alone promises to significantly boost the Houston market’s data center capacity. Data center developer Serverfarm plans to use part of a $3 billion credit facility to build a 250-acre, AI-ready data center campus near Houston with a potential capacity of more than 500 megawatts. The Houston campus and two other Serverfarm projects are already leased to unidentified tenants, according to CoStar.

A 60-megawatt, AI-ready Serverfarm data center is under construction in Houston. The $137 million, 438,000-square-foot project, located near the former headquarters of computer manufacturer Compaq, is supposed to be completed in the third quarter of 2027.

Data Center Map identifies 59 data centers in the Houston area managed by 36 operators, including DataBank, Data Foundry, Digital Realty, IBM, Logix Fiber Networks, Lumen and TRG Datacenters. That compares with more than 180 data centers in Dallas-Fort Worth, more than 50 in the San Antonio area and 40 in the Austin area.

Texas is home to more than 400 data centers, according to Data Center Map.

In November, Google said it’s investing $40 billion to build AI data centers in West Texas and the Texas Panhandle.

“This is a Texas-sized investment in the future of our great state,” Gov. Greg Abbott said when Google’s commitment was announced. “Texas is the epicenter of AI development, where companies can pair innovation with expanding energy. Google's $40 billion investment makes Texas Google's largest investment in any state in the country and supports energy efficiency and workforce development in our state.”

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