The Biden administration is making a major push to develop a domestic hydrogen economy by funding 7 regional hydrogen hubs across the United States. The hubs will share up to $7 billion in federal funding aimed at spurring hydrogen production and use.
President Joe Biden and Energy Secretary Jennifer Granholm announced Friday the selection of hubs in Appalachia, California, the Gulf Coast, the Heartland, Mid-Atlantic, Midwest, and Pacific Northwest regions. The funds come from last year’s Bipartisan Infrastructure Law.
Accelerating the Hydrogen Economy
The goal is to accelerate the growth of a clean hydrogen industry in the U.S. Hydrogen is a versatile fuel seen as a critical tool for decarbonizing major sectors like heavy industry, transportation, and power generation.
When produced using low-carbon methods, hydrogen can provide emissions-free energy for hard-to-abate sectors. Expanding hydrogen is a key plank of the Biden administration’s strategy to cut greenhouse gas emissions and combat climate change.
The 16-state regional hubs model fosters clusters of hydrogen supply and demand, minimizing transportation needs. The administration expects the $7 billion federal injection to mobilize over $43 billion in private capital.
Leveraging Regional Strengths
Each hydrogen hub leverages unique geographic strengths ideal for clean hydrogen production. For example:
- The Appalachia Hub will use the region’s abundant natural gas supply, applying carbon capture to lower emissions.
- California and the Pacific Northwest have access to seaports critical for shipping hydrogen.
- The Heartland can utilize wind resources to produce hydrogen via electrolysis.
- The Midwest Hub will tap into nuclear power to make hydrogen.
In addition to production, the regional hubs focus on cultivating local hydrogen markets. Some will provide hydrogen for industrial uses while others may focus on fertilizer or fuel cell vehicle growth.
Building on Bipartisan Policy
The hydrogen hub funding originated from the bipartisan infrastructure package passed in 2021. The law included $8 billion for at least four regional hubs.
The Biden administration expanded the program to seven hubs to extend geographic impact. The policy builds on bipartisan support for advancing hydrogen in the U.S.
Last year’s Infrastructure Investment and Jobs Act also created a hydrogen production tax credit. The recently passed Inflation Reduction Act further boosted hydrogen incentives with an additional $3 per kg production credit.
The Energy Department will provide guidance on utilizing the tax credits later this year. The credits will aid long-term viability of the regional hubs.
Spurring Private Investment
The federal money is intended to galvanize substantial private capital investment in building out hydrogen infrastructure. Siting hydrogen hubs near key anchor facilities can spur economic growth.
For example, California’s hub grants will likely stimulate billions in private funding around port facilities. Financial incentives like the hydrogen tax credits create ideal conditions for private sector buy-in.
Over time, decreasing costs through scale and technology improvements could make hydrogen competitive with conventional fuels. The regional hubs represent a starting point designed to nurture both supply and demand.
Next Steps for Growth
The hydrogen hubs mark an important early phase of U.S. efforts to scale up the hydrogen economy. Biden administration officials noted work remains to develop connective infrastructure and further applications.
Ongoing policy support via research funding, incentives, and enabling regulation will help drive growth. Continued bipartisan cooperation around hydrogen could lead to additional catalytic investments.
With the right policy environment, hydrogen could become a major pillar of America’s clean energy economy. The regional hubs represent a down payment on the infrastructure needed to realize hydrogen’s vast decarbonization potential across the economy.
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