US Energy Department Plans $8 Billion in Hydrogen Initiatives

Feb. 15, 2022

Feb. 15—Washington — The Department of Energy on Tuesday announced it is requesting information on how to spend billions of dollars in new funding for hydrogen projects approved through the bipartisan infrastructure bill.

The hydrogen initiatives were among several projects announced Tuesday as part of a Biden administration push to decarbonize the industrial sector, including a new "Buy Clean" task force that will encourage low-carbon federal purchases, new guidance and transparency requirements for carbon-capture projects, and funding for industrial energy assessment trainings.

The Energy Department will spend $8 billion on at least four hydrogen "hubs" across the United States that will build out a network for producing, processing, delivering and storing hydrogen.

"We know that clean hydrogen can reduce emissions in many sectors of the economy, especially in heavy industries like steel manufacturing and fertilizer production, and create brand new jobs and pause every stage of deployment," a senior administration official said, speaking on condition of anonymity.

Under the infrastructure law, the hubs must support different types of hydrogen production and use — including hubs that can produce hydrogen from fossil fuels, nuclear energy and renewable energy. At least one hub must produce hydrogen that can be used in transportation, industry, power generation, and heating.

The focus on multiple types of hydrogen has been controversial, with some environmental groups raising concerns that it would lengthen the life of fossil fuel industries and others arguing it has a role in decarbonizing areas that would otherwise be hard to reach.

Administration officials said they will issue a formal solicitation on spending the $8 billion after the request for information from companies, environmental groups and other experts, which will help determine how to structure the hubs and how many there should be.

The auto industry has largely turned to electricity as the low-emission fuel of the future, but industry analysts say hydrogen can be useful in cutting emissions in uses where batteries would be too expensive or heavy, such as aviation and long-haul trucking.

Automakers continue to invest in hydrogen fuel cells, including General Motors Co., Stellantis NV, Toyota Motor Corp., BMW AG and Volkswagen AG. GM announced last month that it would supply fuel cell power systems to a generator and rapid-charging company based in Utah.

The Department of Energy also launched a $1 billion program Tuesday for research into clean hydrogen electrolysis, the method of producing hydrogen from renewable energy such as wind and solar power. It also announced $500 million for a research and development program for manufacturing and recycling clean hydrogen-related equipment.

DOE is aiming to reduce the cost of clean hydrogen by 80% within a decade to $1 per kilogram and announced $28 million for research and development of engineering projects for industrial, electricity and transportation-related clean hydrogen.

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