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Senate infrastructure bill would create, fund road map to US hydrogen economy

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A hydrogen truck moves through a loading facility at a Plug Power production facility.
Source: Plug Power

The federal government would create a clean hydrogen strategy and invest billions of dollars to lay the foundation for a nationwide hydrogen network under the Senate's bipartisan infrastructure bill.

The Infrastructure Investment and Jobs Act proposed a substantial expansion to the scope of the U.S. Energy Department's current hydrogen program and sharpened the initiative's focus on decarbonizing the economy. Under the legislation, the DOE would take new steps to deploy hydrogen technology and facilitate a hydrogen economy, including funding several regional production and consumption hubs.

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The DOE has long operated a program to partner with the private sector to demonstrate and commercialize hydrogen and fuel cell technology. The infrastructure bill updates that program, which was outlined in the Energy Policy Act of 2005. Congress passed the sweeping energy legislation during a previous hydrogen development cycle that suffered from timing. It preceded a boom in U.S. oil and gas production and failed to spur widespread hydrogen adoption.

Targeting 'clean' hydrogen

In a significant change from the 2005 act, the bill would focus the federal program squarely on developing clean hydrogen, reflecting the imperative to produce only low- and no-carbon supplies. Nearly all hydrogen produced in the U.S. today is through steam methane reformation of natural gas, a process that releases carbon dioxide.

To define clean hydrogen, the bill directs the DOE and the U.S. Environmental Protection Agency to develop a carbon intensity standard for all forms of hydrogen production. To be considered "clean hydrogen," a kilogram of hydrogen cannot yield more than 2 kilograms of carbon dioxide-equivalent greenhouse gas emissions during production. Five years after establishing the initial clean hydrogen qualification, the agencies must determine whether the standard should be revised lower. The statutory definition for "clean hydrogen" would be hydrogen produced in compliance with the standard.

So long as hydrogen supplies meet the standard, the bill would support production from renewable energy resources, fossil fuel, nuclear energy and hydrogen-carrier fuels such as ethanol and methanol. However, in another change from the 2005 law, the bill would direct the energy secretary to advance and support hydrogen production from fossil fuels only when paired with carbon capture technology.

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The bill also would expand the overarching program activities envisioned in the 2005 law. It would direct the DOE to carry out activities that support clean hydrogen use in industrial applications such as steelmaking and cement production; residential and commercial space and water heating; and for air, sea and rail transportation. The 2005 law focused the DOE on developing hydrogen uses for electric power generation and hybrid vehicles.

New programs include hydrogen hubs, electrolyzer funding

The bill would direct the DOE to develop a "technologically and economically feasible" national clean hydrogen strategy to facilitate a hydrogen economy. The report would be due 180 days after the bill is enacted, and the DOE would have to update it at least every three years.

The bill would allocate $8 billion over four years for the DOE to develop at least four clean hydrogen hubs, a network of regional suppliers and consumers, and the infrastructure necessary to connect them. The hubs would help the DOE achieve its clean energy production standard and demonstrate hydrogen production, processing, delivery, storage and end use. The bill said the hubs should be capable of growing into a national hydrogen network.

To the extent possible, at least one of the hubs must demonstrate hydrogen production from one of three sources: fossil fuels, renewable energy and nuclear energy. Similarly, at least one hub must demonstrate one of four end uses: electric power generation, industrial applications, residential and commercial heating, and transportation. The bill would direct the DOE to select different U.S. regions and to site at least two hubs in the top natural gas-producing regions, a provision that would favor Texas, Pennsylvania, Ohio or West Virginia.

These criteria are likely to draw opposition from climate activists, progressive Democrats and hydrogen stakeholders. Some environmentalists have called for policymakers to prioritize green hydrogen production and to reserve hydrogen supplies for hard-to-electrify sectors. And while many energy system experts believe that blue hydrogen will be critical in the early phases of a hydrogen economy, debates about the value of using hydrogen for certain end uses are not uncommon.

The bill would, however, appropriate $1 billion for a program to improve and reduce the costs of producing hydrogen through electrolysis, the process of splitting hydrogen from water. The technology is most closely associated with producing green hydrogen from renewable electric power but can also be paired with nuclear power plants.

The program would seek to slash the cost of hydrogen produced through electrolysis to less than $2 per kilogram by 2026. The DOE launched a program in June to cut the cost of green hydrogen from about $5/kg to $1/kg within a decade.

The bill would allocate $500 million over four years to fund multiyear grants for hydrogen research, development and demonstration projects to advance new clean hydrogen technologies and techniques. Lawmakers directed the DOE to prioritize projects that increase efficiency and cost-effectiveness, support domestic supply chain development, and incorporate nonhazardous materials. Priority would also be given to projects in Indigenous communities and economically distressed areas of natural gas-producing regions.

The appropriation would also cover grants for projects that develop ways to reuse and recycle hydrogen technology.

The bill would appoint the National Energy Technology Laboratory as a clearinghouse to collect and distribute clean hydrogen information to other DOE national laboratories, colleges and universities, research institutes, and industrial and international researchers.