Biden Announces $7B Investment in Regional Hydrogen Hubs

PHILADELPHIA — President Joe Biden used a trip to Philadelphia today to tout his economic record and announce his administration is investing $7 billion to launch seven regional clean hydrogen hubs across the nation.

In a statement released before his departure from Washington, the White House described clean hydrogen as “essential to achieving the president’s vision of a strong clean energy economy” and net-zero greenhouse gas emissions in the U.S. by 2050.

But some environmentalists are already pushing back at the administration because they feel some, if not all, of the funded projects fall short when it comes to the opportunity to eliminate fossil fuels.

The funding includes $1.2 billion to the Houston, Texas-based “Gulf Coast Hydrogen” hub being developed by HyVelocity, whose partners include the oil and gas giants ExxonMobil and Chevron as partners.

Another $925 million is supporting the Appalachian Hydrogen Hub, a project backed in part by Marathon Petroleum and EQT, a natural gas producer.

In both cases, the hubs are expected to produce most of their hydrogen by processes reliant on fossil fuels and then capturing the emissions before they make it into the environment.

Funded by the bipartisan infrastructure law, the seven “H2HUBs” are intended to kickstart a national network of clean hydrogen producers and connective infrastructure and promote the use of clean hydrogen as a consumer and business product.

The hubs are expected to collectively produce 3 million metric tons of hydrogen annually, reaching nearly a third of the 2030 U.S. production target and lowering emissions from hard-to-decarbonize industrial sectors — like cement and steel making — that represent 30% of total U.S. carbon emissions. 

Together, the White House said, the hubs will also reduce 25 million metric tons of carbon dioxide emissions from end-uses each year — an amount roughly equivalent to combined annual emissions of 5.5 million gasoline-powered cars. 

“Unlocking the full potential of hydrogen — a versatile fuel that can be made from almost any energy resource in virtually every part of the country — is crucial to achieving Biden’s goal of American industry powered by American clean energy, ensuring less volatility and more affordable energy options for American families and businesses,” said Energy Secretary Jennifer Granholm, who was traveling with the president. 

“With this historic investment, the administration is laying the foundation for a new, American-led industry that will propel the global clean energy transition while creating high-quality jobs and delivering healthier communities in every pocket of the nation,” she said.

Clean hydrogen is a flexible energy carrier that can be produced from a diverse mix of domestic clean energy resources, including renewables, nuclear and fossil resources with safe and responsible carbon capture. 

It could also be used as a form of long-duration energy storage to support the expansion of renewable power. 

The hubs receiving funding are:

California Hydrogen Hub, a partnership between the Alliance for Renewable Clean Hydrogen Energy Systems and the state of California, which is receiving $1.2 billion to produce hydrogen exclusively from renewable energy and biomass.

Once implemented, the project is expected to provide a blueprint for decarbonizing public transportation, heavy-duty trucking and port operations — key emissions drivers in the state and sources of air pollution that are among the hardest to decarbonize.

The partners have also committed to requiring project labor agreements for all projects connected to the hub, which will expand opportunities for disadvantaged communities and create an expected 220,000 direct jobs, including 90,000 permanent jobs.

The Midwest Hydrogen Hub, a partnership between the Midwest Alliance for Clean Hydrogen and the states of Illinois, Indiana and Michigan, which is getting $1 billion.

According to a fact sheet distributed by the Energy Department, the project will enable decarbonization through strategic hydrogen uses including steel and glass production, power generation, refining, heavy-duty transportation and sustainable aviation fuel. In doing so, the White House estimates it will create about 13,600 direct jobs, including 1,500 permanent positions.

The Pacific Northwest Hydrogen Hub, a partnership between the states of Washington, Oregon and Montana, will also receive $1 billion, with which the partners plan to leverage the region’s abundant renewable resources to produce clean hydrogen exclusively via electrolysis.

It is anticipated wide-scale use of electrolyzers on the project will help drive down the cost of the technology, making it more accessible to other producers and reducing the cost of hydrogen production. 

Mid-Atlantic Hydrogen Hub, a partnership between the states of Pennsylvania, Delaware and New Jersey, is receiving $750 million, which it will use to repurpose historic oil infrastructure and use existing rights-of-way.

The partnership plans to develop renewable hydrogen production facilities from renewable and nuclear electricity using both established and innovative electrolyzer technologies, where it can help reduce costs and drive further technology adoption.

As part of its labor and workforce commitments to the community, the Mid-Atlantic Hydrogen Hub plans to negotiate Project Labor Agreements for all projects and provide close to $14 million for regional Workforce Development Boards that will serve as partners for community college training and pre-apprenticeships.

The White House said the project will create 20,800 direct jobs, including 6,400 permanent jobs.

The Heartland Hydrogen Hub, a partnership between Minnesota, North Dakota and South Dakota, is getting $925 million to help decarbonize the agricultural sector’s production of fertilizer, decrease the regional cost of clean hydrogen and advance the use of clean hydrogen in electric generation and for cold climate space heating.

It will also offer what the administration called “unique opportunities” of equity ownership to tribal communities through an equity partnership and to local farmers and farmer co-ops through a private sector partnership that will allow local farmers to receive more competitive pricing for clean fertilizer. 

The Heartland Hydrogen Hub anticipates creating upwards of 3,880 direct jobs, including 3,067 in construction jobs and 703 permanent jobs.

The aforementioned Appalachian Hydrogen Hub will leverage the region’s ample access to low-cost natural gas to produce low-cost clean hydrogen and permanently and safely store the associated carbon emissions. 

In addition, the strategic location of the hub and the development of hydrogen pipelines, multiple hydrogen fueling stations and permanent CO2 storage also have the potential to drive down the cost of hydrogen distribution and storage, the department said. 

The White House pegs the job gains at 21,000 direct jobs, including more than 3,000 permanent jobs.

Finally, Gulf Coast Hydrogen Hub will be engaged in large-scale hydrogen production through both natural gas with carbon capture and renewables-powered electrolysis, leveraging the Gulf Coast region’s abundant renewable energy and natural gas supply to drive down the cost of hydrogen — a crucial step to achieving market liftoff. 

The project is expected to result in the creation of 45,000 direct jobs and 10,000 permanent jobs. 

While almost no hydrogen is currently produced in the U.S., that figure could increase to 10 million metric tons by 2030, according to the Energy Department.

The administration has started an effort to reduce costs — one of the biggest barriers to hydrogen’s widespread use — by 80% to $1 a kilogram by 2030.

In a statement Sen. Joe Manchin, D-W.Va., said his home state won the hub — and the $925 million in federal support that comes with it “because of the hard work of countless individuals and organizations.”

Chairman of the Senate Energy Committee when the bipartisan infrastructure bill was passed, Manchin said it will now place West Virginia “on the leading edge of building out the new hydrogen market” while bringing good-paying jobs and new economic opportunity to the state.

Sen. Shelley Moore Capito, R-W.Va., also described Friday’s announcement as “a major win” for the team that will create the hub, and the future of economic development and energy production in the state.

In California, meanwhile, Gov. Gavin Newsom described the announced investment in his state as a milestone.

“Today we are moving from concept to reality — advancing clean, renewable hydrogen in California, which is essential to meeting our climate goals,” Newsom said in a written statement. 

“We would not be here without Biden’s leadership and his signature bipartisan infrastructure law which has served as a catalyst for the nation in addressing climate change. California’s hydrogen hub will cut pollution, power our clean energy economy and create hundreds of thousands of good-paying jobs,” the governor said.

Among those voicing concern after the funding announcement were members of the Sierra Club, which only supports the use of hydrogen made through electrolysis that is powered by renewable energy, so-called “green” hydrogen, with targeted end uses in sectors that cannot easily be electrified, like the steel or concrete sectors.

In the Sierra Club’s view, fossil fuel-based hydrogen, so-called “blue” hydrogen, is not a climate solution.

“Completing the transition to a clean energy economy requires innovation and a bold vision from our elected leaders,” said Sierra Club executive director Ben Jealous in a written statement.

“The fossil fuel industry is working to continue our nation’s reliance on fossil fuels by any means necessary — and hydrogen offers yet another possible inroad for Big Oil and Gas to lock in polluting and non-economic uses of gas for decades to come,” Jealous said.

“Decision-makers in the administration and at the local level must be wary of these attempts and ensure as much hydrogen-specific funding as possible goes to green hydrogen and its most efficient end uses to ensure this investment actually addresses climate change,” he said.

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