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What makes for a good clean hydrogen hub? 

June 8, 2022 Work Area: Zero-Carbon Fuels

Low-emissions hydrogen is a critical component of the climate change solution set, and it is likely to play a major role in affordably achieving full, economy-wide decarbonization by midcentury while meeting the world’s growing energy needs. We already know that electrification combined with a massive buildout of zero-emissions electricity will help achieve much of the work of decarbonization, but more than 80% of final energy use in the U.S. comes from fuels.i Though many of those fuel uses can be electrified, electrifying some hard-to-abate sectors of the economy (such as marine shipping and ironmaking) likely will be either commercially impossible or prohibitively expensive. For these sectors, we will need zero-carbon fuels, namely hydrogen and ammonia, to reach full decarbonization. In fact, the International Energy Agency (IEA) projects that the world’s demand for hydrogen use will need to increase by almost 500% between 2020 and 2050 to hit midcentury climate goals.ii 

While policy and private sector incentives for low-emissions hydrogen and ammonia are not yet commonplace, the U.S.’s Infrastructure Investment and Jobs Act (IIJA) of 2021, also known as the Bipartisan Infrastructure Law (BIL), created an important new program to help realize this vision. The IIJA authorized the U.S. Department of Energy (DOE) to spend $8 billion to create at least four “regional clean hydrogen hubs.”

What is a clean hydrogen hub? 

A clean hydrogen hub is a regional network consisting of the production, end-use, and connective infrastructure needed to produce, transport, store, and use clean hydrogen in a functional regional market. These potentially large demonstration projects are intended to test and prove out the technologies needed to minimize the greenhouse gas (GHG) emissions intensity of hydrogen production, to use it in new applications to aid decarbonization, and to store and transport it in new ways to meet the demands of a newly formed national hydrogen market.iii 

What makes for a good clean hydrogen hub? 

On June 6, 2022, DOE published a Notice of Intent for the Regional Clean Hydrogen Hubs program, and they plan to issue a Funding Opportunity Announcement in the Fall of 2022. DOE has an important opportunity at this juncture to significantly and effectively advance demonstrations for clean hydrogen production, use, and infrastructure through the development of regional clean hydrogen economies. CATF offered recommendations for implementation of the hydrogen hub program as a response to DOE’s Request for Information in early 2022. Below, CATF outlines the steps that all regional hydrogen hubs should take to ensure they are clean, equitable, and sustainable: 

1. Minimize the greenhouse gas (GHG) intensity of hydrogen production 

In order to decarbonize hard-to-electrify sectors, we must build out a significant supply of low-emissions hydrogen production while focusing on minimizing the GHG-intensity across the entire hydrogen value chain, regardless of how that hydrogen is produced. This means that upstream emissions from producing the natural gas and/or electricity used to make hydrogen must be absolutely minimized. 

GHG intensity of hydrogen should be minimized to every feasible extent. DOE should carefully select hubs to take full advantage of regional low-carbon energy resources, and hub developers and hydrogen producers should adhere to the following guidelines:  

  • Hydrogen producers that use natural gas and carbon capture must source natural gas from producers with strong systems in place for detecting and eliminating methane venting, flaring, and leakage from gas production and transport infrastructure, maximize carbon capture and storage (CCS) rates, and minimize CO2 emissions from the production process or use of grid electricity.iv 
  • Hydrogen producers that use electrolyzers must site their production in regions with abundant capacity for zero-carbon electricity (i.e., renewable or nuclear energy), maximize their use of that zero-carbon electricity, and minimize their use of grid electricity. Zero-carbon electricity used for electrolysis should be additional to both existing and planned generation. 

2. Maximize climate impact with end-use sectors that are most likely to need hydrogen to decarbonize 

An effective hydrogen hub that functions as a regional market will need to have many good off-takers, or consumers, for its hydrogen. Ideally, most of those off-takers will be consumers from key end-use sectors that are likely to require hydrogen to decarbonize, including: 

  • Heavy-duty, long-haul trucking, 
  • Marine shipping, 
  • Aviation, 
  • Ironmaking, 
  • High temperature industrial process heating, and 
  • Power sector load balancing to enable a renewables-heavy electricity grid. 

DOE and hubs developers should prioritize technology development and commercial preparedness of these climate-beneficial off-takers. For example, DOE could favor hydrogen hub applicants in regions that have major truck depots, ports, or a significant number of industrial facilities. 

3. Commit to meaningful community engagement and a focus on environmental justice 

Hydrogen hub developers and DOE must prioritize equity and environmental justice by conducting meaningful community engagement, directing benefits of their projects toward local communities, and supporting local workforces and economies. As Secretary of Energy Granholm made clear during DOE’s Annual Merit Review for hydrogen on June 6, 2022, DOE will specifically look for hydrogen hub proposals that prioritize environmental justice and equity, community engagement, and workforce development.  

At a minimum, DOE should ensure that hubs regions: 

  • Create structures and expectations for local community engagement that allow for meaningful citizen input throughout the full planning and development process and implement best practices for making input solicitation more accessible, such as holding open meetings outside of typical 9am to 5pm working hours.v 
  • Create local, sustained jobs that meet prevailing wages and support local workforce development efforts throughout the full clean hydrogen value chain. 
  • Conduct a comprehensive community environmental health assessment and—if selected for DOE hubs funding—report to DOE at least annually on the status of the benchmarks.  

Delivering maximum benefits and minimum costs (both environmentally and economically) to local communities will help ensure that hydrogen hubs are successfully integrated into their regions and that they are built to sustainably contribute to their communities in the decades to come. 

4. Deliver near-term environmental benefits for the communities living in hydrogen hub regions 

Hydrogen hubs should ensure that, overall, their projects deliver benefits in terms of environmental indicators like air quality and water use for their regions (and at an absolute minimum, the net environmental impact of a hub should be neutral). This should be prioritized as a near-term, tangible benefit for communities in which hydrogen hubs are sited. As an example, diesel emissions from trucks and other vehicles cause local air pollution which has a significant cost on both human health and the environment. Replacing those diesel trucks with hydrogen fuel cell electric vehicle (FCEV) trucks would have an immediate impact by improving local air quality in that community.  

From a policy proposal to fully established clean hydrogen hubs 

As hydrogen’s key role in achieving full decarbonization becomes clear, what appeared a small provision in a bipartisan bill last year has in fact shaped up to be extremely important. While DOE is still establishing the program and developing its plans for how to solicit and select proposals, many states and regions are already organizing into self-proclaimed hydrogen The success of reaching full decarbonization through the use of zero-carbon fuels in the U.S. will to some extent depend on whether these emerging, low-emissions hydrogen hub regions are effectively built and developed over the coming decade to demonstrate the technology as an interconnected system and reduce costs. DOE has a clear opportunity and responsibility to ensure they’re established in a way that catalyzes the hydrogen economy, helps communities, and maximizes climate benefits. 

i Of the 69.7 quads of total energy delivered in the U.S., 12.5 quads—or 18%—are from electricity. See the U.S. Energy Information Administration, U.S. energy consumption by source and sector, 2020

ii See IEA’s “Net Zero by 2050” report: IEA projects that hydrogen use will increase from around 90 million metric tons in 2020 to around 530 million metric tons in 2050. 

iii Traditionally, “conventional” hydrogen has been produced and used on-site or nearby, for either petroleum refineries or for making ammonia for fertilizer. 

iv Notably, even if the regulations currently under consideration by U.S. EPA are finalized and fully implemented, significant upstream emissions will remain from natural gas production, processing, and transport. Options to further minimize greenhouse gas emissions from these industries, beyond the measures required by regulations, are available, and hydrogen producers should require gas suppliers to adopt these approaches.    

v Other best practices for expanding the accessibility of public outreach include webinars, toll-free numbers, online portals, WhatsApp communications, and small community conversations to allow community members to learn about projects and share their input however is most convenient. 

vi States and regions making plans for hydrogen hubs as of mid-2021 include: the Appalachian region (Pennsylvania, West Virginia, and Ohio); HALO (Arkansas, Louisiana, and Oklahoma); Houston, Texas; Los Angeles, California; North and South Carolina; the Northeast (New York, Connecticut, Massachusetts, and New Jersey); Washington state; and the Western Inter-States Hydrogen Hub (WISHH, Colorado, New Mexico, Utah, and Wyoming). 

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