How Texas Leads the Next Generation of Energy Exports

Texas is a global leader in energy exports, responsible for around 30% of all US and 8% of all global Liquefied Natural Gas (LNG) exports, built on its oil and gas resources, energy infrastructure, industrial capacity, and ports.

Now, a new  critical commodity is emerging for a future that increasingly cares about emissions transparent products: carbon. Rather than letting CO₂ from industrial processes be wasted into the atmosphere, there are opportunities to capture and use this carbon to create the essential products modern life depends on, including plastics, fertilizers, synthetic fibers, and transportation fuels. Doing so necessitates development of a robust capture, transport, utilization, and storage of CO₂ ecosystem, collectively categorized as carbon management.

Texas can meet a new wave of demand as countries and customers that historically imported LNG diversify toward low-emissions commodities like sustainable aviation fuel (SAF)[1],  fuels for shipping (i.e., e-methanol) [2], or fertilizers (i.e., low-emissions ammonia). Other countries are moving quickly to build the infrastructure and policies needed to supply these products. Texas’s future energy leadership will depend on how quickly it can build and diversify its own energy infrastructure, including pipelines, processing units, storage facilities, and other corridors for the electricity, hydrogen, and carbon dioxide needed to produce these commodities.

Without further investment in and development of carbon management infrastructure, Texas risks ceding its first-mover advantage in emerging markets to competitors who are already securing supply chains and export relationships. It also risks a significant economic development opportunity. RMI estimates scaling carbon management investment could generate up to $182 billion in cumulative economic benefits for the state.

Low-emissions commodity production depends on cheap, reliable access to captured CO₂ and clear rules for moving it to market. To attract these investments, Texas needs a pro-development environment for energy projects, including streamlined permitting, particularly around carbon dioxide injection wells, modern regulatory frameworks for ammonia and CO₂ infrastructure, and resolved questions about CO₂ storage liability.

A New Export Market is Growing
The global market for low-emissions commodities is expanding, driven predominantly by policies in Europe and Asia aiming to decarbonize and diversify energy sources, alongside voluntary corporate demand. By 2050, Power-to-Liquids (PtL) SAF production could reach around 180 million metric tons per year, roughly half of current global jet fuel demand.[3] E-methanol production could reach around 250 million metric tons per year, more than twice the size of today’s global methanol demand,[4] while low-emissions ammonia production could reach up to about 150 million metric tons per year, roughly 80% of current global ammonia production.[5]

                  Europe is one of the strongest policy-backed demand centers for low-emissions goods, and is motivating imports for clean commodities like SAF, e-methanol, and ammonia. The European Union’s (EU) Renewable Energy Directive III (RED III) requires that 42% of hydrogen used in industry be produced from renewable electricity. Its aviation and maritime emissions regulations are heightening clean fuel demand in these sectors. Its carbon border adjustment mechanism (CBAM) requires importers to pay a carbon price for embedded emissions from cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen, and it is continually evolving the imports covered by the program. Roughly 18% of Texas’s goods are exported to the EU, and while only a subset are covered by CBAM, affected Texas products could face additional costs for their emissions.

Asian economies are also driving demand. Japan’s Green Transformation (GX) policies support low-carbon hydrogen and ammonia, while South Korea’s Clean Hydrogen Power Auction supports long-term contracts for low-emissions fuels.

Import-dependent markets such as those in East Asia or Europe are unlikely to cost-competitively nor exclusively produce all the fuel they will need domestically, creating an opportunity for export-oriented regions like Texas. Average SAF prices in Northwest Europe through early 2027 are projected to be roughly $2,750 per metric ton, well above average US prices. While producers in China and India may have cost advantages in exporting these commodities, Texas can compete. Its existing energy infrastructure, high-quality solar and wind resources, pipelines, ports, industrial facilities, and skilled workforce provide a foundation for reliable low-emissions fuel supply chains. For fuels produced from captured carbon, these advantages are reinforced by Texas’s CO₂ transport and storage infrastructure and the federal 45Q carbon oxide sequestration tax credit, which can reduce the cost of capturing and permanently storing CO_2. Competition isn’t limited to global markets, either. Gulf Coast states like Louisiana are also investing in low-carbon fuel production and carbon management infrastructure, threatening Texas’s export dominance closer to home.

Corporate buyers seeking to decarbonize their supply chains are also supplementing policy-backed demand. Over the last five years, over 100 unique companies have joined emergent buyers’ alliances for sustainable aviation fuel (SABA), shipping fuel (ZEMBA), high value chemicals, green ammonia fertilizer (GABA), cement (SCoBA), and steel (SSBP). These alliances are creating scalable structures for voluntary purchasing to supplement policy-backed demand for these low-emissions commodities.

Growing Texas Industry
For Texas, capturing a meaningful share of these growing global markets represents an opportunity larger than the value of the fuels themselves. Diversifying the state’s export base can create a more resilient economy as global demand grows for low-emissions fuels and feedstocks. In 2025, Texas exported $450 billion worth of goods globally, including $55 billion of chemicals such as ammonia and methanol, with manufacturing exports supporting roughly 75% of all export supported jobs in the state. Growing low-emissions industries could unlock new revenue and business opportunities while reducing dependence on any single energy market.

Diversification could also reduce Texas’s exposure to volatility in conventional energy markets. Oil and gas markets remain susceptible to shifts in global supply and demand, geopolitical disruptions, weather events, and infrastructure constraints. These interconnected pressures in crude oil markets and natural gas price dynamics can amplify market disruptions, underscoring the value of a diversified energy supply chain and export portfolio to reduce exposure to individual market shocks while strengthening Texas’s export economy.

Texas is already beginning to compete for this investment. While its project pipeline remains smaller than global competitors, the state is attracting investment across industry incumbents and innovators. Texas has six planned PtL SAF projects with a combined goal capacity of approximately 2.1 million metric tons per year, representing 16% of the US project pipeline, including Infinium’s “Project Roadrunner,” which is under construction. Texas also has three e-methanol projects and 16 low-emissions ammonia projects planned or operational. Major investments such as Woodside Energy’s Beaumont New Ammonia project and INNEOS Acetyls and Sandpiper Chemicals’ low-carbon methanol project demonstrate that private companies are already looking to invest in Texas to capitalize on the opportunity presented by low-emissions fuels.

Turning this project pipeline into a globally competitive industry will require a significant expansion of Texas’s infrastructure and production capacity. Producing and exporting low-emissions ammonia, e-methanol, and sustainable aviation fuel will require private capital, efficient permitting, and development of electricity generation and transmission, hydrogen production, carbon capture, transport, storage, and fuel production. Coordinated investment across this system can serve export growth while also expanding the energy infrastructure available to support reliable industrial development in Texas

The scale of infrastructure and feedstock development will depend on the share of emerging global markets Texas captures. Sustainable aviation fuel provides one illustration. RMI analysis suggests that supplying 10% of the projected 180 million metric tons global PtL SAF market in 2050 would require developing SAF production capabilities more than nine times greater than the future forecasted annual jet-fuel consumption at Houston’s George Bush Intercontinental Airport.[6] This could require a scale of hydrogen production nearly three times greater than Texas’s current annual production[7] and 59 million metric tons of CO₂ each year – equivalent to roughly 16% of the CO₂ Texas’s industry and power plants emit annually.

The electricity needs could be even larger. Producing 18 million metric tons of PtL SAF in the state could require roughly 1.4 times the electricity Texas currently generates in one year[8] – more than four times its current wind and solar output combined.[9] Aviation is only one potential market: capturing meaningful shares of e-methanol and ammonia demand would require additional investment in low-emissions generation, transmission, electrolyzers, CO₂ capture and transport infrastructure, and production facilities. Texas’s existing energy and industrial base provides a strong foundation, but competing at a global scale would require significant, coordinated development across the value chain.

The scale of this buildout illustrates both the size of the potential private investment and industrial development opportunity and the challenge of capturing it. Realizing the opportunity will depend on Texas’s ability to enable coordinated development across an interconnected energy and industrial system while maintaining reliable, affordable energy as demand grows.

Global Leadership Isn’t Guaranteed
Texas will not have unlimited time to capture this opportunity. China, India, and countries throughout the Middle East are already building industrial capacity to compete in these markets. For SAF production, China has eight planned plants targeting approximately 1.8 million metric tons of annual capacity, and India and the Middle East each have a facility. The e-methanol pipeline is even larger, with 51 projects planned, under construction, or operational across these regions, and most planned capacity is expected in the next decade. These investments demonstrate that competing regions are already moving to establish production capacity and position themselves in emerging global clean fuels markets. Other Gulf Coast states, namely Louisiana, are also making a significant push to capture this growing market for lower-emissions fuels.

This growing pipeline means the infrastructure, production capacity, and commercial relationships that will serve emerging global markets are already taking shape. Texas’s inability to diversify its export portfolio and enable these industries risks undermining its long-term competitiveness and resilience. As buyers increasingly seek lower-emissions supply, delayed entry could cost Texas export market share, investment, and first-mover relationships that may shape markets for hydrogen, SAF, e-methanol, ammonia, and other commodities. The same infrastructure buildout also matters domestically: energy-intensive industries, from advanced manufacturing, including semiconductor chips or chemicals, increasingly consider the availability, reliability, and cost of energy when making investment decisions. Maintaining leadership across these markets help Texas withstand shifts in both domestic and global demand and retain its prominence in both markets.

Texas’s pro-development environment has helped make it a global energy leader. Maintaining that leadership as markets evolve will require applying the same approach to the next generation of energy and industrial infrastructure. As these markets shift, continuing to ensure the diversity of industries and energy types – including electricity, hydrogen, and carbon capture – can allow innovators and incumbents to expand their business in the state. This means enabling investment in electricity generation and transmission; hydrogen, ammonia, SAF, and methanol production; and hydrogen and CO₂ pipelines and storage. Maintaining efficient permitting and sufficient processing capacity, closing regulatory gaps such as a pipeline framework for low-emissions fuels and long-term CO₂ storage liability, and modernizing tax exemptions to reflect these new industries will also be critical to turning market demand and private investment into projects.

By enabling coordinated development across these systems, Texas can capture a meaningful share of emerging global markets while expanding and diversifying the infrastructure that supports reliability, affordability, and energy security at home.

[1] Sustainable aviation fuel, or SAF, is nearly chemically identical fuel to kerosene -based jet fuel and can be dropped into existing aircraft but are produced via biomass or through renewable electricity.

[2] e-Methanol is methanol produced by splitting water using electricity to get hydrogen and combining that hydrogen with captured CO₂.   

[3] RMI, Market Outlook October 2024 – Sustainable Aviation Fuel puts global aviation consumed at approximately 107 billion gallons in 2024 (~324 million metric tons, converted at 0.8 kg/L).

[4] IRENA and Methanol Institute, Innovation Outlook: Renewable Methanol (2021)puts global methanol demand at about 98 million metric tons in 2019, with production capacity of roughly 150 million metric tons.

[5] Mission Possible Partnership, Making Net Zero Possible (2022), puts current annual ammonia production at approximately 185 million metric tons.

[6] Based on projected 2028 planning levels for IAH airport; taken from the IAH Master Plan released in 2015.

[7] 3.6 million metric tons

[8] Approximately 770 TWh annually would be needed, compared to Texas’s current annual generation of approximately 567 TWh from EIA Texas Electricity Profile.

[9] Based on ERCOT generation information; 40.6 GW of wind and 34.5 GW of solar in 2025, equivalent to 115 TWh of wind with a 32% annual capacity factor and 68 TWh of solar with 22% annual capacity factor.