On October 13, 2023, the Department of Energy (“DOE”) Office of Clean Energy Demonstrations (“OCED”) announced $7 billion in funding for seven Regional Clean Hydrogen Hubs (“H2Hubs”) spanning 16 states.  The goal of the H2Hubs is “to accelerate the commercial-scale deployment of low-cost, clean hydrogen—a valuable energy product that can be produced with zero or near-zero carbon emissions.” The H2Hubs are expected to collectively produce three million metric tons of hydrogen and reduce 25 million metric tons of carbon dioxide emissions from end-uses annually. 

Award negotiations will commence promptly and will bring further definition to the legal commitments of each hub participant. Various federal regulations will apply to these projects and Baker Botts stands ready to help clients navigate the award negotiation and subsequent project development phases.

Background

The 2021 Bipartisan Infrastructure Law (“BIL”) allocated up to $7 billion to help fund six to 10 regional clean hydrogen hubs across the United States. Secretary Granholm has described the H2Hubs as “a once-in-a-generation opportunity to lay the foundation for the clean hydrogen future” and observed that “[w]ith input from America’s brightest scientists, engineers, community organizers, and entrepreneurs, this national hydrogen strategy will help us accelerate the development and deployment of technologies to realize the full potential of clean hydrogen energy for generations to come.”

Selected Projects

DOE selected the following seven projects for negotiations:

• Appalachian Hydrogen Hub (Appalachian Regional Clean Hydrogen Hub (“ARCH2”)) – Located in West Virginia, Ohio, and Pennsylvania, the Appalachian Hydrogen Hub “will leverage the region’s ample access to low-cost natural gas to produce low-cost clean hydrogen and permanently store the associated carbon emissions” and aims to bring “quality job opportunities to workers in coal communities.”
  
  
• California Hydrogen Hub (Alliance for Renewable Clean Hydrogen Energy System (“ARCHES”)) – Located in California, the California Hydrogen Hub will “leverage the Golden State’s leadership in clean energy technology to produce hydrogen exclusively from renewable energy and biomass” and “will provide a blueprint for decarbonizing public transportation, heavy duty trucking, and port operations.”
  
  
• Gulf Coast Hydrogen Hub (HyVelocity H2Hub) – Located in the Houston, Texas region, the Gulf Coast Hydrogen Hub “will help kickstart the clean hydrogen economy with its plans for large scale hydrogen production using both natural gas with carbon capture and renewables-powered electrolysis, leveraging the Gulf Coast region’s abundant renewable energy and natural gas supply to drive down the cost of hydrogen.”
  
  
• Heartland Hydrogen Hub – Located in Minnesota, North Dakota, and South Dakota, the Heartland Hydrogen Hub “will leverage the region’s abundant energy resources to help decarbonize the agricultural sector’s production of fertilizer, decrease the regional cost of clean hydrogen, and advance the use of clean hydrogen in electric generation and for cold climate space heating.” It also offers equity ownership opportunities to tribal communities.
  
  
• Mid-Atlantic Hydrogen Hub (Mid-Atlantic Clean Hydrogen Hub (“MACH2”)) – Located in Pennsylvania, Delaware, and New Jersey, the Mid-Atlantic Hydrogen Hub will repurpose “historic oil infrastructure and us[e] existing rights-of-way” to develop “renewable hydrogen production facilities from renewable and nuclear electricity using both established and innovative electrolyzer technologies.”
  
  
• Midwest Hydrogen Hub (Midwest Alliance for Clean Hydrogen (“MachH2”)) – Located in Illinois, Indiana, and Michigan, the Midwest Hydrogen Hub “will enable decarbonization through strategic hydrogen uses including steel and glass production, power generation, refining, heavy-duty transportation, and sustainable aviation fuel.”
   
• Pacific Northwest Hydrogen Hub (PNW H2) – Located in Washington, Oregon, and Montana, the Pacific Northwest Hydrogen Hub “plans to leverage the region’s abundant renewable resources to produce clean hydrogen exclusively via electrolysis.”

DOE’s $7 billion investment in these projects will be combined with H2Hubs selectees’ cost share of more than $40 billion. Each selectee was also required to develop a Community Benefits Plan that will help meet the goals of the Biden Administration’s Justice40 Initiative, which aims to ensure that 40% of the overall benefits of certain Federal investments flow to disadvantaged communities. 

More information about the selected projects, and the H2Hubs Initiative, is available here.

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