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Global Decarbonization Hub

Accelerating the path to economic development and decarbonization

Houston, we have a solution!

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.

What we do

Strategy and value creation

Helping clients establish differentiated value-creation strategy across technologies and end-markets

Enabling circular value creation

Enabling circular value chains, including business models, project definition, feedstock optimization

Ecosystem-building

Supporting ecosystem consortium building, bringing together players across the value chain, including business models, commercial implications, project specifications

Energy-transition analytics and benchmarking

CCUS and H2 capex benchmarking insights via Energy Insights, Westney Capital Analytics, Sustainability Insights, and Vivid Economics

Asset decarbonization

Developing and applying technologies such as hydrogen and CCUS, modeling abatement pathways, green-power sourcing, circular pathways

Green growth and business building

Accelerating new business building in mature industries and scaling up energy transition among the disruptor and startup community

Client capability-building program (Energy Transition Academy)

Developing structured Energy Transition Capability-Building Program, including thematic events around H2, CCUS, electric power net-zero; marquee program centered around Sustainability Transformation Methodology

2050 snapshot

A vision for Texas as a hydrogen hub would position it as a global leader in hydrogen production, use, innovation, talent development, equity, and justice.

180K

potential jobs created

directly, indirectly, and induced in the hydrogen economy

$100

billion

potential addition to Texas’ GDP (6% of the state’s 2019 GDP)

220

million tons (Mt)

global CO2 abatement potential from 21 Mt of hydrogen

Impact stories

Ten-year asset decarbonization plan to abate up to 50Mt of carbon

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.

Roadmap identifies how to boost carbon reduction by 67 percent

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:

  • 67 percent potential increase in emission reductions to 2030
  • $50 million plus annual opex savings from additional NPV-positive levers
  • Pilot sites identified for CCS and H2 in the next five years

Scalable plastic circular economy pilot to boost recycling

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.

Featured capabilities

Energy Insights 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.

New at McKinsey Blog

Blog Post

McKinsey opens Global Decarbonization Hub in Houston to accelerate clean energy efforts

– Partnering with the Houston Chamber of Commerce, our firm is contributing to a major energy transition in the region

Featured insights

Report

Houston as the epicenter of a global clean-hydrogen hub

– Clean hydrogen is emerging as a viable way to reach net zero. In the United States, clean-hydrogen efforts in Houston, Texas, could serve as a template for other regions.
Article

How the Gulf of Mexico can further the energy transition

– Long recognized as a pillar of US energy production, deepwater Gulf of Mexico could help provide the resources the world needs... during the energy transition.
Article

Addressing the challenges of plastic waste: Circularity and leakage

– Circularity alone won’t stop leakage. Emerging economies still need to have proper waste management systems for their plastic... and other materials.
Report

Climate impact of plastics

– Plastics are frequently criticized for everything from their toxicity to their contributions to ocean pollution, but they play... an important role in reducing greenhouse gas emissions.
Interactive

Global Energy Perspective 2022

– We're in the midst of an energy transition that continues to evolve.
Collection

The net-zero transition: What it would cost, what it could bring

– This McKinsey report offers a detailed look at the economic and societal impact of the transition to net-zero carbon emissions... by 2050.
Article

Net zero by 2035: A pathway to rapidly decarbonize the US power system

– Ten strategic moves can help the power sector play a pivotal role in reducing carbon emissions.
Article

Organizing for sustainability success: Where, and how, leaders can start

– As sustainability becomes more of a strategic and operational imperative, executives must lead the way to set up a sustainability... organization that’s right for their companies.
Report

Houston: Leading the energy transition

Developed with insights and analysis from McKinsey, this strategy report from the Greater Houston Partnership builds upon Houston’s... expertise and infrastructure in the energy and chemical sectors to accelerate low-carbon solutions that position Houston as the leading hub of energy and clean tech innovation.
Article

Plastics recycling: Using an economic-feasibility lens to select the next moves

– The Plastics Recovery and Reuse model helps identify the most effective moves to boost plastics recycling, using analysis of... fully integrated economics across the value chain.
Article

The future is now: How oil and gas companies can decarbonize

– As the pressure to act on climate change builds, the industry should consider a range of options.
Article

Accelerating plastic recovery in the United States

– Plastic waste is a critical issue of our time. Effecting change will require an integrated approach.
Article

Unlocking future growth for deepwater in the Gulf of Mexico

– McKinsey projects deepwater prospects will be an important part of future global oil and gas supply, with the Gulf of Mexico representing... a sizable portion of new production expectations for 2030.

Related practices

Oil & Gas

Learn how we help our clients develop strategies to manage risk, improve performance, and build lasting capabilities.

Sustainability

Learn how we work with private- and public-sector institutions on challenges created by growing pressure on resource systems and... increasing environmental risk.

Electric Power & Natural Gas

Discover how we help clients in the energy industry rethink strategies, build capabilities, and improve performance for sustained,... competitive advantage.

Chemicals

Learn how we help our clients in the chemical industry meet evolving challenges and capture new opportunities.