The Biden administration will invest $7 billion in seven different hydrogen production "hubs" across the United States. It's part of President Joe Biden's plan to transition the country to clean energy, although hydrogen's environmental benefits still depend on an overhaul of how the traditional fuel is made.
Burning hydrogen produces only water vapor, whereas fossil fuels release greenhouse gases when burned. This is particularly important for cleaning heavy industries such as aviation, shipping and steel, which have less access to renewable energy and batteries. The tricky part with hydrogen is cleaning up the contamination created during the manufacturing process. Currently, most hydrogen is made using fossil fuels, and some new centers will continue to use natural gas to produce hydrogen.
The Biden administration has been planning the centers since last year. During his visit to Philadelphia today, Biden will announce seven selected sites funded through the Bipartisan Infrastructure Law. The centers are expected to catalyze another $40 billion in private investment, according to a White House press release.
The center in the Pacific Northwest, spanning Washington, Oregon and Montana, will use renewable energy to produce hydrogen. One center in California will use renewable energy and burn biomass. Two centers in the Mid-Atlantic (Pennsylvania, Delaware and New Jersey) and the Heartland (Minnesota and the Dakotas) will use a mix of renewable and nuclear energy.
The cost of producing hydrogen using clean energy is still much higher than using traditional methods. The Biden administration aims to reduce costs by 80% to $1 per kilogram within ten years. To that end, Biden last year authorized the use of the Defense Production Act to promote the development of a domestic supply chain for clean energy technologies, including electrolysers that split water molecules to create hydrogen.
An alternative to electrolysis is steam methane reforming. Methane, the main component of so-called natural gas, reacts with steam to produce hydrogen, but the process still releases carbon dioxide. U.S. government plans push for new hubs to capture the carbon dioxide emitted by natural gas, but the technology remains expensive and has yet to be proven on a large scale. Additionally, leaking methane, a very potent greenhouse gas, is a huge problem for natural gas infrastructure that cannot be solved by capturing carbon dioxide alone.
The Center of Appalachia, which includes the states of West Virginia, Ohio and Pennsylvania, will use natural gas to create hydrogen. The Midwest hubs in Illinois, Indiana and Michigan will use natural gas, renewables and nuclear energy. The center on the Texas Gulf Coast will rely on natural gas and renewable energy.
Ultimately, the Biden administration plans to have all seven centers reduce cumulative carbon dioxide emissions by 25 million metric tons per year, which is roughly equivalent to taking more than 5.5 million cars off the road each year. Centralizing hydrogen production in "hubs" is also a cost-saving measure because the facilities can share infrastructure such as pipelines and storage. The Biden administration has also pledged to provide thousands of jobs at these centers as part of its Justice 40 initiative, which pledges to ensure that 40% of proceeds from federal investments go to "marginalized, underserved, and pollution-burdened" communities.