U.S. President Joe Biden announced a significant milestone in the country’s move towards clean energy by revealing USD7bn in federal grants for the development of seven regional hydrogen hubs across 16 states, as reported by Reuters on October 13. These hubs, a crucial part of Biden’s plan to decarbonize the economy, aim to produce “clean hydrogen” for challenging industrial sectors like steel and cement production. Major companies such as Exxon Mobil [XOM:US] and Amazon [AMZN:US]  are involved in these projects, reflecting the broad corporate engagement in the initiative. However, challenges such as high interest rates and uncertainties regarding permits and subsidies have raised concerns among industry representatives.

The selected hydrogen hubs, ranging from the Middle Atlantic to the Pacific Northwest and California, will go through an extensive process, including design, financing, and construction phases. While the Biden administration is pushing for rapid progress in clean hydrogen production, questions about economic viability and the implementation of carbon capture technology persist. Additionally, industry players are awaiting guidance from the Treasury Department on accessing subsidies, with environmentalists advocating for stringent criteria to ensure genuinely low-emission hydrogen production. Despite the enthusiasm for clean energy initiatives, the journey towards large-scale hydrogen production still faces hurdles that need to be carefully navigated for the ambitious plan to succeed.

Sources:

https://asia.nikkei.com/Business/Energy/Biden-selects-7-hydrogen-hubs-in-16-states-for-7bn-in-grants

https://www.whitehouse.gov/briefing-room/statements-releases/2023/10/13/biden-harris-administration-announces-regional-clean-hydrogen-hubs-to-drive-clean-manufacturing-and-jobs/

https://www.reuters.com/business/energy/biden-selects-7-hydrogen-hubs-across-16-states-7-billion-us-grants-2023-10-13/