California to receive over $12 billion for renewable hydrogen hub

The U.S. Department of Energy and the Alliance for Renewable Clean Hydrogen Energy Systems, or ARCHES, agreed to fund a renewable hydrogen hub on Wednesday, according to the office of California Gov. Gavin Newsom. The state will receive an initial $30 million from the government with future payments totaling up to $1.2 billion in federal funds from the U.S. Department of Energy, ARCHES said in a Wednesday statement. The additional $11.4 billion came from public and private fund matching, the release added.

Washington, Minnesota, Texas, Pennsylvania, West Virginia, and Illinois will also host hydrogen hubs and receive federal funding, according to the White House. Some of these hubs will cover multiple states. President Biden pledged $7 billion to fund hubs in seven states in October 2023 under the Bipartisan Infrastructure Law. California has recently demonstrated experience producing and utilizing hydrogen fuel. Last week, the state unveiled what it said was the world’s first hydrogen-powered ferry in San Francisco Bay. Additionally, California-based Jobe Aviation announced its hydrogen-electric air taxi prototype conducted a successful 523-mile flight, with water as the only by-product.

What will the hub do? The California hub is expected to launch a network of renewable hydrogen production sites to reduce the use of fossil fuels. By swapping gas for hydrogen in public transportation, heavy-duty trucking, and port operations, officials aim to cut about 2 million metric tons of annual gas emissions. That would cut about the same annual emissions produced by 445,000 gasoline-fueled cars, according to Newsom’s press release.

The hub will create an estimated 220,000 new jobs of which about 40 percent would be permanent, according to Newsom’s office. At least 40 percent of the project’s benefits will go to disadvantaged communities through community-directed investments and family-supporting jobs, his office added. ARCHES estimated civilians may save $2.95 billion in annual healthcare costs from the improved air quality brought about by hydrogen fuel.

How can hydrogen be used as a fuel? Hydrogen can generate energy through an electrochemical reaction rather than the combustion reaction that takes place when gas is burned in a car engine. Hydrogen fuel, recognized as a clean energy source, only leaves behind water, as opposed to carbon dioxide from fossil fuels. Hydrogen can also be produced through several solar and wind-based methods.

However, not all forms of hydrogen fuel production are considered clean energy processes. During the process of natural gas reforming, natural gas is mixed with a synthesis gas composed of hydrogen, carbon monoxide, and carbon dioxide. When hot steam is added into the mix, it kicks off a reaction and produces hydrogen molecules. This process produces harmful gasses like nitrogen oxides, carbon monoxide, and volatile organic compounds. About 95 percent of all hydrogen is produced by natural gas reforming, according to the Energy Department. Once produced, hydrogen fuel can be used to power everything from buses and cars to private homes.

Dig deeper: Read Tobin Jacobson’s report on Biden introducing a tax credit for hydrogen producers last year.