On Friday, President Biden and Energy Secretary Jennifer Granholm announced the selection of 7 hydrogen hub projects across the U.S. that will receive a total of $7 billion in federal funding.
The goal is to establish regional clean hydrogen networks to help decarbonize multiple sectors of the economy including transportation, electricity generation, and manufacturing.
The announcement took place at the Port of Philadelphia, which will be home to one of the new hydrogen hubs spanning Pennsylvania, New Jersey and Delaware. Up to $750 million will go towards converting existing natural gas infrastructure to produce low-carbon “blue” hydrogen made from natural gas paired with carbon capture.
Air Liquide, PBF Energy, and other regional partners plan to use this hydrogen supply to reduce emissions from heavy-duty equipment at the bustling port.
President Biden stressed that these projects will create good-paying jobs for American workers while also helping combat climate change. He stated, “Clean hydrogen is going to help us meet this goal. When it comes to charging our cars or powering our homes, all we need is clean electricity.”
Hydrogen emits zero greenhouse gases when used as a fuel source and can be produced from renewable electricity via electrolysis. However, currently most hydrogen in the U.S. is made from natural gas in a process that releases carbon dioxide.
The Biden administration aims to drastically scale up hydrogen production and drop costs to $1/kilogram by 2030 – an 80% reduction. This would make hydrogen cost-competitive with conventional fuels.
The newly announced hydrogen hubs represent regional public-private partnerships centered around anchor end-users of hydrogen like ports and manufacturing plants. Partners include major companies like Amazon, Air Products, ExxonMobil, Chevron, Constellation Energy, and Exelon.
For example, a California hub is getting up to $1.2 billion to supply hydrogen for zero-emissions public transportation and freight operations. Partners include AC Transit, Amazon, and Bay Area Air Quality Management District. The hydrogen will be produced from renewable electricity and biomass.
A hub led by Pennsylvania Senator Joe Manchin will deploy $925 million to produce hydrogen from natural gas with carbon capture technology. EQT Corporation, a major natural gas producer, is participating along with other regional companies.
The Gulf Coast Hub anchored in Houston was awarded up to $1.2 billion and involves ExxonMobil, Chevron, and other oil and gas majors. They plan to leverage existing pipelines, caverns, and other infrastructure to store and transport clean hydrogen.
In the Midwest, a nuclear-renewable hydrogen hub received $1 billion in funds. The hub will provide hydrogen to decarbonize steel and glass manufacturing across Minnesota, Wisconsin, and Ohio.
Utility company Exelon and reactor operator Constellation Energy are partners, planning to use both renewable energy and nuclear power to split water molecules into hydrogen and oxygen.
Environmental groups have voiced concerns about large-scale hydrogen made from fossil fuels, even with carbon capture. They warn it could perpetuate dependence on natural gas and discourage a transition directly to renewable energy.
However, the Biden administration states that hydrogen will play a crucial role in decarbonizing hard-to-electrify sectors of the economy like heavy industry and long-haul transportation. Energy Secretary Granholm said, “Clean hydrogen is an essential piece of the puzzle for a net-zero economy.”
An additional $1 billion will be made available to stimulate demand for clean hydrogen through purchase agreements and other incentives. The administration views public investment as key to scaling up hydrogen and bringing down costs quickly enough to meet their goal of net-zero emissions by 2050.
President Biden emphasized the existential threat posed by climate change, stating at the announcement, “Clean hydrogen is going to help us meet this goal…That lets us get to this place without putting more carbon in the atmosphere.”