U.S. Department of Energy Spends $7 Billion on Hydrogen Hub Projects

The United States will launch hydrogen manufacturing, storage, and delivery hubs with funding of $7 billion from the Department of Energy. The funds will go toward a specific goal: supporting seven regional hubs that together should be able to meet about a third of the United States’ clean energy production goals by 2030.

Though it is not currently produced on a large scale in the United States, hydrogen has been recognized as a flexible energy carrier that can be produced from a variety of clean energy resources. In addition, it has gained recognition as an efficient alternative to fuel for uses like heavy-duty transportation and industrial processes, both of which use large amounts of energy but are notoriously difficult to decarbonize.

The new hubs are projected to reduce carbon emissions by 25 million metric tons annually, equivalent to the emissions from 5.5 million gasoline-powered vehicles.

Funding recipients of the Department of Energy’s grants will be anticipated to provide matching funds, bringing the total investment in the hubs to around $50 billion. This is one of the largest investments in clean manufacturing and jobs in U.S. history, and it will hopefully help the country achieve its energy security and climate goals.

“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 President Biden’s goal of American industry powered by American clean energy, ensuring less volatility and more affordable energy options for American families and businesses,” stated U.S. Secretary of Energy Jennifer Granholm. “With this historic investment, the Biden-Harris 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.”

Proposals for Hydrogen Hubs have been evaluated on a variety of factors, such as the expected growth of each hub and the positive impact the projects would have on their local communities.

The Appalachian region, the Gulf Coast, and the state of California were among the seven chosen. Initial hydrogen production costs will be reduced by the Department of Energy funding, and private sector investments have been secured to increase market stability for the Hubs. The chosen projects cover a wide range of sectors and objectives.

A good example is Amazon’s support for the California Hydrogen Hub. Funded at $1.2 billion, the project’s goal is to create hydrogen using only renewable energy and biomass. Public transportation, heavy-duty trucking, and port operations can all benefit from the decarbonization of hydrogen production.

Meanwhile, the Gulf Coast Hub, which will be partially funded by ExxonMobil, will use a combination of renewable energy (electrolysis) and fossil fuel (natural gas with carbon capture). According to reports, the project will reduce annual emissions by about 7 million metric tons by using hydrogen to power fuel cell electric trucks, industrial processes, and refineries.