Input Stories

The Energy Department has committed up to $2.2 billion for hydrogen “hubs” in the U.S. (Utility Dive). 
 
What’s going on: “The U.S. Department of Energy on Wednesday finalized award commitments of $1.2 billion for the Gulf Coast Hydrogen Hub and $1 billion for the Midwest Hydrogen Hub.”  

• The two projects are part of a $7 billion effort by the Biden administration to bolster the clean hydrogen industry using funds from the 2021 Bipartisan Infrastructure Act.
• With this week’s announcement, just two hubs are now awaiting final approval. Others, in California, the Pacific Northwest and Appalachia, have been awarded funds already (E&E News).    

Hub details: The Gulf Coast hub that secured funding this week has project sites in the Houston and South Texas areas. It plans to make hydrogen “from both low-carbon sources and natural gas tied to carbon capture” and expects to create about 45,000 jobs over the course of the project’s lifetime (E&E News). 

• The Midwest hub’s sites are in Michigan, Indiana, Illinois and Iowa, and that project will use natural gas, wind and nuclear power “to decarbonize power generation.” It will create about 12,000 jobs in its lifetime, according to estimates.  

Why it’s important: The “approvals will clear the way for hydrogen projects that were waiting for associated infrastructure or offtake agreements to come together,” though the final guidance for the 45V hydrogen production tax credit—which is still unavailable to companies—is likely to determine the success of the hubs.

• The NAM has urged the Treasury Department—which said last month it is aiming to finalize the 45V guidance by the end of 2024—to maintain flexibility in the proposed rules.
• In their current iteration, the regulations could “create significant uncertainty for manufacturers who are considering making long-term capital investments, potentially slowing or stopping new projects,” the NAM told Congress earlier this year.  

Our view: “Hydrogen has great potential as part of the all-of-the-above energy economy, and the NAM supports the hubs,” said NAM Director of Energy and Resources Policy Michael Davin. “But without meaningful changes, the 45V hydrogen production tax credit guidance will fail to deliver the support the hubs and this emerging industry both need.”