Biden Administration Awards $7 Billion to Build Clean Hydrogen Hubs Across the U.S.

Clean hydrogen is a promising tool to fight climate change, but it barely exists today.

Yes, the solutions have always been here!

The Biden administration is trying to stand up an entire industry from scratch by awarding $7 billion to create seven regional hydrogen hubs across the U.S.

Dozens of regions competed for the money, which will be awarded to proposed hydrogen projects in the Gulf Coast, Mid-Atlantic, Appalachia, the Midwest, the Upper Midwest, and the Pacific Northwest.

A proposed hub in California will also receive funding.

Biden and Energy Secretary traveled to the Port of Philadelphia on Friday to announce the funding, which the president called “transformational.”

In theory, hydrogen could be used to help produce steel, cement, chemicals and fertilizer.

Yes, it would revolutionize the industrial processes.

It could also be used to power trucks, ships or airplanes or to produce electricity, all without emitting the greenhouse gases that are dangerously heating the planet.

A major challenge, however, is figuring out how to manufacture that hydrogen cleanly.

Today, companies usually extract hydrogen from natural gas in a process that emits large amounts of carbon dioxide.

But it is also possible to produce hydrogen without any emissions — by, for instance, using wind turbines or solar panels to power electrolyzers that can split water into hydrogen and oxygen.

The catch is that making hydrogen this way is still two to three times as expensive as making it with natural gas.

To help jump-start a hydrogen economy, Congress approved $8 billion to create regional hydrogen hubs as part of the 2021 bipartisan infrastructure law.

As part of the Inflation Reduction Act of 2022, lawmakers approved a hefty tax credit for companies that produce low-emissions hydrogen, in the hopes of driving down the cost of production.

The Department of Energy estimates that the use of cleaner forms of hydrogen could grow to 10 million tons per year by 2030, up from virtually nothing today.

The hydrogen hubs will take slightly different approaches. The hub in California aims to produce hydrogen from renewable energy and use the fuel to power heavy-duty trucks and port operations.

Another proposed hub in Illinois, Indiana and Michigan plans to use a portion of electricity from existing nuclear reactors to produce hydrogen.

It would explore whether the fuel could be used in steel and glass production, refineries, power plants and airplanes.

By contrast, the Appalachian hub, which will span parts of Pennsylvania, West Virginia and Ohio, is expected to continue to use natural gas to produce hydrogen.

However, companies will seek to capture carbon dioxide emissions from the process and bury it underground.

As a first step, the Energy Department will give awardees initial grants to create more detailed proposals. If the agency deems the projects viable, it will disburse more money over time.

The Biden administration's investment in hydrogen hubs is a bold move to jump-start a new clean energy industry.

Hydrogen has the potential to play a major role in decarbonizing our economy, but it's important to make sure that it is produced and used in a sustainable way.