Biden administration announces $7 billion for 7 regional hydrogen energy ‘hubs’

The Biden administration is putting $7 billion into regional “hubs” around the country dedicated to producing hydrogen energy — touting the funds as an effort to fight climate change and create jobs.

These hubs are clusters of facilities located in the same geographic area aiming to produce and consume hydrogen — as well as related infrastructure such as pipelines.  

They are located in Appalachia, California, the Gulf Coast, the mid-Atlantic, the Midwest the Pacific Northwest and an area referred to as the “Heartland” that encompasses the Dakotas and Minnesota. 

An administration official told reporters Thursday that the hubs will create tens of thousands of jobs and catalyze more than $40 billion in private investment.

Hydrogen energy is created by separating hydrogen from oxygen in water molecules — producing hydrogen energy. 

The administration has touted it as a potential climate solution, as hydrogen can be used in industries such as aviation and steel manufacturing that are otherwise difficult to cut emissions from. 

“With this historic investment, the Biden-Harris Administration is laying the foundation for a new, American-led industry that will propel the global clean energy transition while creating high quality jobs and delivering healthier communities in every pocket of the nation,” Energy Secretary Jennifer Granholm said in a written statement.  

However, climate advocates have said this type of energy is only an effective solution if the hydrogen production process is powered by new clean energy sources. 

They argue that if the creation of hydrogen energy is powered by existing energy sources, even clean ones, they are taking up energy that could be put to other uses — and that may be replaced by fossil fuels. 

On a call with reporters Thursday, an administration official said that “some” of the hubs will use new clean energy, while others will rely on electricity that’s already on the grid or other existing power sources. 

Erik Kamrath, federal hydrogen advocate at the Natural Resources Defense Council, said in a written statement that there need to be “strong guardrails to ensure that U.S. hydrogen does not create an emissions mess.”

In particular, he pointed to forthcoming guidance from the Treasury Department, which is weighing how to determine when hydrogen is considered clean in order to be eligible for a separate tax credit. 

“Weak Treasury guidelines will severely compromise any climate benefits from the H2Hubs,” Kamrath said.  

Nevertheless, administration officials touted the hubs as a win for the planet. A press release said that they are expected together to reduce 25 million metric tons of carbon dioxide of carbon dioxide emissions from “end-uses” — when hydrogen is used instead of other fuels —each year. 

On the labor front, an administration official said “multiple” hubs will have project-labor agreements, which are labor agreements negotiated with unions.

The seven regional hubs will encompass 16 total states. 

The Appalachian hub will span West Virginia, Ohio and Pennsylvania, will be powered by natural gas, and its emissions will be captured and stored.

The California hub will be powered by renewables and biomass and will look to power public transit, heavy-duty trucks and port operations. 

The Gulf Coast hub will be centered in the Houston area and will be powered by renewables and natural gas.

The hub in the Dakotas and Minnesota will power the production of fertilizer. 

The mid-Atlantic hub will span Pennsylvania, Delaware and New Jersey and will be powered by renewable and nuclear energy. 

The Midwest hub, encompassing Illinois, Indiana and Michigan, will power steel and glass production, heavy-duty transportation and aviation and will produce hydrogen from renewables, gas and nuclear. 

The Pacific Northwest hub will be in Washington, Oregon and Montana.

President Biden is expected to announce the funding from the Bipartisan Infrastructure Law during a visit to Philadelphia. 

The announcement received at least some praise from the other side of the aisle. 

Sen. Shelley Moore Capito (R-W.Va.) said in a written statement that she was “so proud West Virginia will continue its tradition as an innovative, energy-producing state.”

Updated at 10:07 a.m. ET