The US has taken a decisive step towards the launch of a national hydrogen strategy with the recent passing by the Senate of a bipartisan infrastructure bill that calls for the creation of four regional hubs supported by $9bn of public funds, with a further $1bn slated for clean hydrogen R&D.

The bill faces an uncertain future as it moves on to the lower chamber of Congress, the House of Representatives, but if it makes it into law the government will be required to develop a national clean hydrogen strategy and roadmap.

“The bill would be a very promising step in fostering the hydrogen economy in the US,” Hook, Kirkland & Ellis

If passed as currently drafted, “the bill would be a very promising step in fostering the hydrogen economy in the US”, says Marcia Hook, a partner with international law firm Kirkland & Ellis who co-authored a blog on the contents on the bill. “It offers exciting opportunities for companies and investors looking to invest in the hydrogen space.”

The bill calls for laying the foundation of a national hydrogen economy, the backbone of which would be a technologically and economically feasible national strategy and roadmap. The strategy must be submitted to Congress within 180 days of the legislation being enacted. 

The legislation also calls for at least $9bn in appropriation from fiscal years 2022-2026 for four clean hydrogen hubs and for a hydrogen electrolysis programme.

Specifically, the bill calls for four regional hydrogen hubs that demonstrate the production, processing, delivery, storage and end-use of clean hydrogen that can be developed into a national network to facilitate a clean hydrogen economy.

The bill defines clean hydrogen as that produced with a carbon intensity equal to or less than 2kg CO₂e/kg of hydrogen produced. Grey hydrogen produced by fossil fuels without carbon capture and storage (CCS) emits some 9.3kg CO₂e/kg of hydrogen produced and is standard today.

Three routes to hydrogen

The hubs are to include three clean-hydrogen production routes—fossil fuels with CCS, renewable energy and nuclear energy. These routes will respectively generate blue, green and pink hydrogen, although the bill avoids these widely used terms.

$9bn – Proposed government funding for hubs in 2022-26

The hubs are to be located in different parts of the US and will use energy that predominates in the region in which they are based. At least two of the regional hydrogen hub programmes must be located in regions of the US with the greatest natural gas resources.

The hubs must also—as much as possible—reflect a diversity of end uses, including electric power generation; industrial; residential and commercial heating; and transport.

The bill also includes $1bn for fiscal years 2022-2026 for R&D, demonstration, commercialisation and deployment of clean hydrogen. This is to improve the efficiency and durability of producing clean hydrogen using electrolysers and to reduce its cost to less than $2/kg of by 2026.

The bill does not, however, include supply-side incentives as used in hydrogen programmes in other countries, Hook notes.

In June, the Biden administration issued a new goal of slashing the cost of clean hydrogen by 80pc, to $1/kg, within a decade.

The $1.2tn bipartisan bill now goes to the House even as Democratic leaders and the White House try to maintain a fragile coalition to back their attempt to pass a separate $3.5tn ‘social infrastructure’ bill. Speaker Nancy Pelosi has said she will not take up one plan without the other.

But some moderate Democrats are saying they want to vote for the bipartisan bill first, while some lawmakers are vowing to sink the bipartisan bill if the $3.5tn package is not passed by the Senate. Pelosi can afford to lose only three votes in the House because the Democrats’ majority is so thin.

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Author: Ros Davidson