Global Decarbonization Hub
Accelerating the path to economic development and decarbonization
The United States is the second-largest source of carbon emissions on the planet, responsible for approximately 25 percent of global emissions. Home to energy companies with assets across the globe, the US Gulf Coast is responsible for approximately 10 percent of national and 3 percent of global emissions; however it directly influences a far greater proportion of these emissions.
This influence creates a unique opportunity for the region to play a meaningful role globally, as we transition the economy and continue to power sustainable, inclusive growth. The US Gulf Coast is a natural leader of the global energy transition and decarbonization movement. Texas is the nation’s primary renewable energy producer, home to half of the nation’s hydrogen pipelines, and its companies have unparalleled capabilities in building and operating complex projects. Houston’s large base of industry and Fortune 500 companies is well positioned to lead the energy transition across multiple green technologies including hydrogen, carbon capture, utilization, and storage (CCUS), circular plastics, and power management.
With a long history of solving many of the world’s greatest challenges—developing medical breakthroughs, leading human spaceflight, and powering the world—Houston is proud to be a city of problem solvers and innovators who tackle big, complicated, and consequential problems. Now once again Houston is being called to solve a global challenge of extreme magnitude: how to meet growing global energy demand while also dramatically cutting climate-changing greenhouse gas emissions.
Our Houston office has a history of entrepreneurial spirit and a legacy of investing in the community, including our ongoing work with the Greater Houston Partnership’s Houston Energy Transition Initiative and the Center for Houston’s Future hydrogen work. To date, we have invested over $15 million in regional decarbonization efforts, and we will continue to accelerate this investment in line with our firm’s broader commitment of $2 billion in cash and in-kind support for social responsibility efforts by 2030. To continue unlocking transformational opportunities for the community and for our clients, we are establishing a Global Decarbonization Hub in Houston—focused on building capabilities, reinventing business models for carbon-exposed businesses, scaling up the energy transition startup community, and attracting and developing unparalleled talent.
The hub builds on multiple transformative sustainability projects, extensive analytics and benchmarking capabilities, and the depth and breadth of our local and global leadership teams.
McKinsey conducted a joint strategy and capability-building project with an oil-and-gas company to support ambitious plans to decarbonize a major asset with growing production over ten years. This included understanding the best way to transition the portfolio to optimize financial and reputational benefits while managing operational, regulatory, and commercial uncertainty. A plan for green power sourcing to meet massive electrification needs leveraged McKinsey Power Solutions modeling capabilities, and considered multiple power-sourcing levers across independent system operators (ISOs) plus new infrastructure needs and partnerships. The transition roadmap identified how to abate 20–50Mt of carbon over the ten-year period.
A major global petrochemical player wanted to enhance its existing decarbonization plans. We conducted a strategic review of the current decarbonization roadmap and identified that the client had potential to exceed its 2030 targets and accelerate its path towards net zero. The client is now using our analysis to increase its climate ambition in the short term and to build a site-level assessment across its portfolio for capital deployment:
When a waste-aggregation service provider and two petrochemical clients wanted to explore how to create a plastic-waste-recycling value chain, we developed a strategy to boost plastic waste collection from residential, commercial, and industrial sources, created an infrastructure for enhanced plastic recycling, and optimized value-chain economics to ensure concept viability. Via this strategic initiative, plastic recycling is expected to increase by 100,000 metric tons per annum in a first pilot facility, with potential to scale across multiple geographies—directly decreasing the amount of waste sent to a landfill each year.
Energy Solutions is McKinsey’s global market intelligence and analytics group, focused on the energy sector. The group enables organizations to make well-informed strategic, tactical, and operational decisions by using an integrated suite of market models, proprietary industry data, and a global network of industry experts.
Chemical Insights delivers a proprietary view on petrochemical market fundamentals, powered by data and analytics, informed by end-market applications, and generated by a team of industry experts.
Sustainability Insights supports organizations’ end-to-end decarbonization journeys through ESG performance analytics and benchmarking, decarbonization scenario modelling, and emissions databases.
Vivid Economics is a strategic economics consultancy firm with broad sustainability and macroeconomic capabilities. We help clients in all sectors around the world successfully navigate the risks and opportunities presented by the economy-wide transition to a more sustainable future. McKinsey acquired Vivid Economics in March 2021.
Westney Capital Analytics is our preeminent cost-and-schedule forecasting solution for capital projects. Westney’s robust analytics platform allows us to develop unbiased and independent perspectives on project performance by leveraging predictive analytics and benchmarking coupled with geospatial data, market intelligence, and deep project expertise.