‘H2Hubs’ will fuel American hydrogen production in $8 billion program

The Department of Energy kicked off a new $8 billion program yesterday to develop a network of hubs for producing hydrogen as a clean fuel. It’s a milestone for one of the Biden administration’s most contentious strategies for tackling climate change.

Hydrogen has the potential to slash emissions from some of the industries that are the hardest to clean up. It might replace coal used in making steel or fossil fuels that power diesel trucks and cargo ships. When burned, it produces water vapor instead of greenhouse gas emissions (although it can still contribute to nitrogen oxide pollution in the air).

The tricky part is that not all hydrogen is created the same way and can come with different benefits and pitfalls. At the moment, most hydrogen is made using gas. To make hydrogen from gas, methane reacts with high-temperature steam under high pressure. That process releases carbon dioxide, and then there’s the threat to the climate that comes from methane leaks across the entire gas industry. Methane is an even more potent greenhouse gas than carbon dioxide.

So, the Biden administration needs to clean up hydrogen production before it can use hydrogen to decarbonize other industries. The DOE laid out part of its plan to clean up that process yesterday when it filed a Notice of Intent (NOI), a document saying that it plans to announce a funding opportunity in September or October to develop clean hydrogen hubs, which it calls “H2Hubs.”

The Bipartisan Infrastructure Law provides funding for at least four hubs; the NOI says the DOE is considering funding between six and 10 hubs to start its program. Of those hubs, at least one is supposed to make hydrogen using renewable energy. Another hub is supposed to power hydrogen production with nuclear energy. And, at least one hub should be able to show it can make clean hydrogen from fossil fuels by pairing it with technologies that capture and sequester carbon dioxide emissions. But the DOE also says it will look for at least two hubs in regions with “abundant natural gas resources,” which could lead to more H2Hubs running on fossil fuels than renewable energy.

Clean energy experts are watching the DOE’s moves closely when it comes to hydrogen. If the DOE isn’t careful about what kinds of projects it chooses, all the hype for hydrogen could give the gas industry a boost at a time when research shows the world should be phasing out the dirty fuel to prevent more catastrophic climate change.

Hydrogen production that pairs gas with carbon capture doesn’t create a truly clean fuel and could even lead to more greenhouse gas emissions in certain scenarios. When that kind of hydrogen is used to heat buildings, for example, it can be even dirtier than the heating systems it replaces, researchers from Stanford and Cornell found in a study published last year. That’s primarily because gas production and use is rife with methane leaks from wells, pipelines, and even appliances in homes and businesses. It’s a big climate problem that could extend to gas-based hydrogen hubs.

Because of that risk, the Department of Energy needs to tighten up its standards for what’s considered a clean hydrogen project, say experts at the nonprofits Union of Concerned Scientists and RMI. Its $8 billion in funding for clean hydrogen comes from the Bipartisan Infrastructure Law passed last year, and the language in the law only considers the climate impact of CO2 emissions at the site of hydrogen production.

A safer approach, according to the nonprofits, would be to scrutinize all greenhouse gas emissions that come from the entire supply chain and the process of making hydrogen. In a sign that the DOE might keep that in mind as it assesses applications for funding, the NOI it issued this week says the department “intends to also evaluate full lifecycle emissions for each application and will give preference to applications that reduce GHG emissions across the full project life cycle.”

Truly “green hydrogen,” in contrast, is made with renewable energy-powered electrolysis that splits water to get to the hydrogen. This process is less polluting, but, at the moment, it’s still more expensive than making hydrogen with gas and carbon capture because electrolyzers are pricey.

The Biden administration is working to bring that cost down. President Joe Biden authorized the use of the Defense Production Act yesterday to bolster domestic supply chains for clean energy technologies, including electrolyzers. The Department of Energy launched an initiative last year aimed at dropping the cost of clean hydrogen by 80 percent to $1 per kilogram by the end of the decade.

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