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Implementation, Policy

It takes a community: Hydrogen hubs and Community Benefits Plans explained 

November 16, 2023 Work Area: Zero-Carbon Fuels
maggie-field Maggie Field

On 11/16/23, California’s hydrogen hub applicant, ARCHES, announced they were publishing their Community Benefits Plan. See here for more information, and we will discuss further in future CATF blogs.

In October 2023, the U.S. Department of Energy (DOE) selected applicants to move into award negotiations for the agency’s Regional Clean Hydrogen Hubs program, which will collectively award $7 billion to seven hubs across 18 states. The chosen hubs will demonstrate a diverse range of clean hydrogen production methods and are projected to eliminate 25 million metric tons of CO2 emissions from hard-to-abate sectors. The program is also expected to catalyze substantial private capital, creating one of the largest investments in clean manufacturing and jobs in history at nearly $50 billion total.  

The hubs program is a crucial step to advancing economy-wide decarbonization through large-scale deployment of clean hydrogen — a critical resource necessary to achieve economy-wide decarbonization, particularly for hard-to-abate sectors. To achieve maximum climate benefits, it is imperative that clean hydrogen is prioritized where other decarbonization options are technically or economically infeasible, starting with displacing existing gray hydrogen (hydrogen produced using fossil fuels without carbon capture) production and followed by no-regrets sectors such as industry and heavy-duty trucking. 

Applicants submitted proposals to DOE for this highly competitive process in April 2023, detailing plans to develop a regional network of clean hydrogen production, end-use, and connective infrastructure. Alongside these technical details, as well as proposed work and management plans, hubs were required to develop and commit to a robust Community Benefits Plan (CBP) — a crucial part of the application scored by DOE reviewers at 20% of the overall proposal. CBPs are meant to ensure hub developers embody local priorities and provide benefits to workers, local communities, and disadvantaged communities. CBPs are a novel approach, and if implemented successfully, hold the potential to mitigate project harms, enhance project benefits, and provide means to support communities in achieving long-term health, social, and economic goals. 

The announcement of the selected hubs is just the start of a multi-year process that will have impacts through the next decade and beyond. CBPs have a critical role to play in hydrogen hub development, and it’s important to take stock of what we currently know about the CBPs that have been developed by the seven hubs selected for award negotiations – so that we can identify and address key challenges moving forward. 

Overview and quick facts   

Community Benefits Plans (CBPs) are a new, and growing, requirement of many federal clean energy programs and can be designed in a variety of ways to align with the intended benefits of a project, ranging from direct payments and procurement agreements to revenue sharing and shared decision-making.   

DOE’s published CBP guidance identifies several key stakeholder groups that hubs are recommended to consider and engage as they develop their unique plans, including labor, various communities (both local and disadvantaged) and tribes. The guidance highlights four core policy priorities: investing in America’s workforce; engaging communities and labor; advancing diversity, equity, inclusion, and accessibility (DEIA); and Justice40 (see figure below.)  

According to OCED, strong CBPs meet these four requirements and include the following success-elements: actionable goals, outcomes, and implementation steps supported by adequate money; people and time resources; clear metrics to measure success; and creation of quality equitably accessible jobs and supporting workforce development.  

CBPs will be simultaneously implemented alongside hub development milestones with an ambitious clean hydrogen deployment schedule until 2035. Most immediately, hub selectees are entering into a multi-month negotiation phase to refine their proposals, and OCED has indicated that impacted communities will have opportunities to engage and help shape CBPs during this phase. Following negotiations, there is a four-phase implementation process with a designated “go / no go” decision in each phase to determine if each hub is eligible to move forward. An evaluation of CBP implementation processes will be a key criterion in those decisions. 

What will Community Benefits Plans look like across the Regional Hubs? 

CBPs are currently confidential, and it remains uncertain when more detailed information about the plans will be made public. In the chart below, CATF has summarized the information that DOE and hub applicants have released about CBPs to date. More information about how impacted communities will be engaged in developing these plans, when full CBPs will be released, and how the DOE scored CBPs will be necessary to support engagement moving forward. Releasing more detailed information on envisioned CBPs will be a critical first step to soliciting meaningful feedback from impacted communities and ensuring that the benefits outlined in the plans align with the needs of impacted communities. 

*A full citation list and methodology for this CBP Table is provided at the end of this blog.  Please note blank spaces indicate a lack of publicly available information. 

A large focus among hubs is on addressing legacy pollution through displacing unabated fossil fuels with clean hydrogen, which will provide health and environmental benefits to communities. Notably, many hubs have emphasized workforce benefits, with three hubs having publicly committed to Project Labor Agreements. All seven have listed projected job numbers—these numbers vary greatly between the hubs, and it is currently unknown how these numbers were calculated. Hubs have also listed a range of strategies for engagement and community governance, with many—but not all—indicating they will create a Community Benefits Advisory Board for CBP implementation. Four hubs have explicitly mentioned tribal engagement, including the Heartland Hub which is offering three tribal partners (as well as farmers and farmer co-ops) equity ownership.  

CBP Implementation Across America’s Diverse & Complex Communities  

Sprawling from coast to coast, the seven hubs selected for negotiation encompass a massive variation of landscapes, cultures, histories, and socio-political dynamics. For the purpose of implementing its demonstration programs (like hydrogen hubs) and Justice40, DOE uses a community analysis tool called the Climate and Economic Justice Screening Tool. The tool highlights census tracks that are overburdened and underserved as being disadvantaged through multiple metrics, including climate change risk, energy access, and affordability, health, and history of legacy pollution.  This interactive map highlights the complexity and diversity of U.S. communities—for one example, just within Los Angeles County there are hundreds of communities categorized as either disadvantaged or not, all existing side by side within a relatively small geographic area.   

The complexity and diversity of American communities is further illustrated by The American Communities Project, which uses data-based analysis to identify 15 unique community types across the U.S., 14 of which are represented in the hub regions. This includes a variety of rural communities – including Hispanic centers in California and the Gulf Coast, rural middle America communities largely comprising the Midwest hub states, aging farmlands (agricultural areas with many seniors) encompassing a large swath of the Heartland Hub, and working-class country (low-income, blue-collar areas) dotted across Appalachia, the Gulf Coast, and Heartland Hub. Other areas include populous big cities, diverse urban suburbs, and the less-diverse exurbs—all three of which are observed in California, the Pacific Northwest, Texas, and the Midwest—and Evangelical hubs, which have a major influence in West Virginia and Texas.  

Lifestyles, values, and quality of life also vary greatly by community, and analysis shows regions in the U.S. with the deepest disadvantage are often overwhelmingly rural, have a history of exploitation, and face a much shorter life expectancy than the wealthiest regions of the country. The American Communities Project showcases the diversity of communities that exist within the disadvantaged categorization in the United States. For hubs to be successful in their respective regions, CBP implementation will need to be locally tailored and culturally appropriate.  

CBP Implementation – Challenges & Moving Forward  

As CBPs move from theory into practice, they will inevitably face many challenges.  CBPs are a relatively new tool and will add increased complexity to the development process.  Ensuring full transparency and engagement is already proving difficult. Even after DOE announced initial selections, hydrogen hub developers remain bound by very strict NDAs. It is possible that details of the projects may not become publicly available until the permitting stage, which creates obvious challenges for transparent engagement with communities. The DOE itself has referenced ways to streamline permitting while also stressing the importance of the permitting process to protect community concerns—which could add considerable time to the process to be done right. This dichotomy highlights the innate tension between project development deadlines and the long-term, robust engagement processes that will be needed to meet CBP obligations and gain community trust to move projects forward.    

This tension is further exacerbated by where this development will be sited, with DOE publicly acknowledging the majority of the hubs will be placed in disadvantaged communities, which historically have been impacted disproportionately by energy development. Many of these communities have been burdened with high pollution, policies of disinvestment and exclusion, and other environmental and economic harms for generations, and simply do not want any additional projects in their communities. Rural communities, which as noted above encompass large areas of many of the hubs, are also especially vulnerable to unintended impacts of large-scale development. In fact, “boom stress” (with an incoming workforce) can strain community infrastructure and public services, bring in heavy traffic congestion, and result in a lack of affordable housing through increased rent and housing projects (Klasic et. al, 2022).    

There is no one-size-fits-all approach to developing a CBP, and working through these many challenges to deeply understand and address the unique needs of each impacted community will be essential for the success of the Regional Clean Hydrogen Hubs Program. CBP planning processes present an opportunity to minimize these additional burdens on communities while ensuring the project’s long-term benefits outweigh negative local impacts.  

Next, we’ll explore pathways for CBP implementation, including frameworks for responding to community needs, and will address key considerations and tools such as community-centric engagement, safety and risk mitigation, and monitoring and accountability. 

*CBP Table Citation & Methodology 

To compile this chart, information was drawn primarily from DOE sources, with additional sourcing from the websites of the seven selected hubs and some external media sources. All links are provided below. This chart is intended only as an initial summary of the publicly available information on Hydrogen Hubs’ CBPs that is known as of November 15, 2023.  It is anticipated that some of the data in this chart may change or evolve as more information becomes publicly available and as hubs continue to develop their CBPs.  

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