Amazon, Exxon, and Air Products Receive $7 Billion in US Funding for Hydrogen Hubs
Written by Sanjay Kumar
In a significant development for the hydrogen industry, projects involving major companies like Amazon.com Inc., Exxon Mobil Corp., and Air Products and Chemicals Inc. are set to receive substantial portions of a $7 billion fund from the United States government. The aim is to establish the United States as a leader in the hydrogen fuel sector.
The announcement was made during an event at the Port of Philadelphia, where President Joe Biden and Energy Secretary Jennifer Granholm officially revealed the seven selected projects. These projects span from Pennsylvania to California and are poised to make a substantial impact on the country’s energy landscape.
The Port of Philadelphia, for instance, will harness hydrogen from a hub proposed for parts of Pennsylvania, Delaware, and New Jersey to power trucks and heavy-duty equipment, marking a significant step toward a greener and more sustainable transportation sector.
President Biden emphasized the economic benefits of these investments, citing the creation of “good paying jobs” for union workers, a critical constituency for his reelection campaign. Additionally, these projects align with the administration’s efforts to combat climate change and reach the goal of net-zero emissions from pollutants by 2050.
President Biden stated, “I made it a goal for our country to get to net-zero emissions from pollutants by 2050. By the way, it’s the only existential threat to humanity, if we don’t stay below these numbers, the whole world is changing. Clean hydrogen is going to help us meet this goal. When it comes to charging our cars or powering our homes, all we need is clean electricity.”
The Biden administration’s commitment to hydrogen and the development of hydrogen hubs, extensive networks that connect hydrogen producers and consumers across multiple states, is in line with the country’s net-zero emissions goal. While the current hydrogen production in the United States is minimal, the Energy Department anticipates an increase to 10 million metric tons by 2030. An ambitious target of reducing hydrogen production costs by 80% to $1 per kilogram by 2030 has also been set.
“Hydrogen can power industries like the production of steel and aluminum,” President Biden noted. “That lets us get to this place without putting more carbon in the atmosphere.”
Among the winning projects is a California-based initiative that will receive up to $1.2 billion and produce hydrogen exclusively from renewable energy and biomass. This project aims to decarbonize public transportation, heavy-duty trucking, and port operations, with notable partners like Amazon and Air Products.
Another notable project backed by Senator Joe Manchin will span parts of West Virginia, Ohio, and Pennsylvania and receive up to $925 million in funding. This project will produce hydrogen using natural gas with carbon capture and is partnering with natural gas producer EQT Corp.
A Gulf Coast hydrogen hub centered in Houston and supported by companies like Exxon and Chevron Corp. secured as much as $1.2 billion in funding. Additionally, a Midwest states coalition proposed a hydrogen hub that would partially rely on nuclear energy to provide hydrogen for various industrial uses, including steel and glass production, and received up to $1 billion in funding. This project has prominent partners like utility company Exelon Corp. and reactor operator Constellation Energy Corp.
These hydrogen hub awards were funded as part of the bipartisan infrastructure law passed in 2021. The selection process was highly competitive, with the Energy Department receiving 79 proposals and urging 33 projects to submit full applications in January.
Furthermore, the Biden administration has revealed plans to award $1 billion to stimulate demand for hydrogen, ensuring market certainty and bolstering demand for this emerging energy source.
While hydrogen is considered a clean-burning energy source, it requires substantial energy for production. The source of this energy is critical, as hydrogen produced using electricity from coal or natural gas can have a significant carbon footprint. Environmentalists have cautioned that widespread hydrogen production could potentially increase demand for fossil-based electricity and contribute to increased greenhouse gas emissions if not produced using clean power sources.
Ben Jealous, the executive director of the Sierra Club, emphasized the need for caution in developing the hydrogen industry, as it presents both opportunities for clean energy and risks of further reliance on fossil fuels.
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