These seven U.S. regions will receive $7 billion in federal funding to produce hydrogen

Key Points

• The U.S. government is launching seven “hydrogen hubs” that are collectively eligible for up to $7 billion in federal funding, as part of its efforts to reduce greenhouse gas emissions and promote clean energy. These hubs aim to develop hydrogen production methods with minimal emissions, a crucial factor in reducing carbon dioxide emissions when using hydrogen as fuel.
• Hydrogen, the simplest and most abundant element on Earth, often needs to be extracted from other compounds, such as water or natural gas, through processes like electrolysis or steam methane reforming. It is being considered for use in industries like long-haul trucking, maritime cargo shipping, and aviation, where it can replace fossil fuels and reduce emissions. Additionally, hydrogen is seen as a potential energy storage solution to balance renewable energy sources’ intermittency, such as wind and solar.
• The seven hydrogen hubs are strategically located across 16 states, aiming to develop the domestic hydrogen economy in the United States. These hubs consist of linked assets, and the $7 billion in federal funding is expected to catalyze approximately $43 billion in private sector investments. The hubs will receive funding based on incremental stage-gate milestones, with a focus on job creation, aligning with President Biden’s clean economy development goals. Each hub has unique characteristics, such as utilizing natural gas, renewable energy, or repurposed infrastructure, to produce hydrogen with an emphasis on low emissions. The hydrogen tax credit included in the Inflation Reduction Act will be a key factor in the hubs’ economic viability, with guidance on its adjudication expected by the end of the year.