Unpicking the US Clean Hydrogen Strategy: What was Actually Unveiled?
In what could be a breakthrough for the energy transition across the globe, the US recently released its Clean Hydrogen Strategy and Roadmap. Hydrogen Industry Leaders highlights what was announced in the report and a breakdown of the legislative language involved.
Given its potential to help address the climate crisis, enhance energy security and resilience, and create economic value, interest in producing and using clean hydrogen is intensifying both in the United States and abroad. Zero- and low-carbon hydrogen is a key part of a comprehensive portfolio of solutions to achieve a sustainable and equitable clean energy future.
The United States is stepping up to accelerate progress through historic investments in clean hydrogen production, midstream infrastructure, and strategically targeted research, development, demonstration, and deployment (RDD&D) in this critical technology.
In November 2021, Congress passed, and President Joseph R. Biden, Jr. signed into law the Infrastructure Investment and Jobs Act (Public Law 117-58), also known as the Bipartisan Infrastructure Law (BIL).
This historic, once-in-a-generation legislation authorises and appropriates $62 billion for the U.S. Department of Energy (DOE), including $9.5 billion for clean hydrogen. Furthermore, in August 2022, President Biden signed the Inflation Reduction Act (IRA) into law (Public Law 117-169), which provides additional policies and incentives for hydrogen including a production tax credit that has further boosted a U.S. market for clean hydrogen.
Long awaited roadmap promises to deliver a hydrogen future
This report sets forth the “U.S. National Clean Hydrogen Strategy and Roadmap.” The report was informed by extensive industry and stakeholder feedback including workshops and listening sessions, written comments from more than 50 organizations, and ongoing engagement. In addition, this roadmap sets forth an all of government approach to clean hydrogen, with contributions across multiple agencies as well as key experts in the Executive Office of the President.
This inclusive and collaborative approach is critical to the success of this expansive technology. The report is meant to be a living strategy that provides a snapshot of hydrogen production, transport, storage, and use in the United States today, as well as an assessment of the opportunity for hydrogen to contribute to national decarbonisation goals across sectors over the next 30 years.
The report will continue to be updated with collaboration across government through interagency coordination. Pathways for clean hydrogen to decarbonise applications are informed by demand scenarios for 2030, 2040, and 2050 with strategic opportunities for 10 million metric tonnes (MMT) of clean hydrogen annually by 2030, 20 MMT annually by 2040, and 50 MMT annually by 2050.
These values are based not only the opportunity for clean hydrogen production in the U.S., but on demand for clean hydrogen use across sectors, informed by achieving market competitiveness in specific applications. Using clean hydrogen can reduce U.S. emissions approximately 10 percent by 2050 relative to 2005,1 consistent with the U.S. Long-Term Climate Strategy.
Third party analysis in DOE’s Pathways to Commercial Liftoff report estimates that by 2030, the hydrogen economy could also result in 100,000 net new direct and indirect jobs due to the build-out of new capital projects and clean hydrogen infrastructure.
These jobs include both direct jobs like engineering and construction, and indirect jobs like manufacturing and raw material supply chains. U.S. National Clean Hydrogen Strategy and Roadmap Realising these opportunities for clean hydrogen will require lower cost of production, the buildout of midstream infrastructure, and increased hydrogen demand in specific sectors where there are fewer cost-competitive or technically feasible alternatives for decarbonisation.
Future updates will adapt to changing landscape
As hydrogen technologies improve and costs fall, we will update this report with analyses assessing the economically and environmentally optimal use of hydrogen in key sectors, the evolving landscape of production announcements and offtake contracts, how project developers are prioritising energy and environmental justice, and other related developments.
This roadmap is based on prioritising three key strategies to ensure that clean hydrogen is developed and adopted as an effective decarbonisation tool for maximum benefit to the United States:
(1) Target strategic, high-impact uses for clean hydrogen. This will ensure that clean hydrogen will be utilised in the highest value applications, where limited deep decarbonization alternatives exist. Specific markets include the industrial sector (e.g., chemicals, steel and refining), heavy-duty transportation, and long-duration energy storage to enable a clean grid. Additional longer-term opportunities include the potential for exporting clean hydrogen or hydrogen carriers and enabling energy security for our allies.
(2) Reduce the cost of clean hydrogen. The Hydrogen Energy Earthshot (Hydrogen Shot) launched in 2021 will catalyse both innovation and scale, stimulating private sector investments, spurring development across the hydrogen supply chain, and dramatically reducing the cost of clean hydrogen. Efforts will also address critical material and supply chain vulnerabilities and design for efficiency, durability, and recyclability. Together with investment in midstream infrastructure (storage, distribution), these initiatives can reduce not only the production cost, but also the delivered cost, of clean hydrogen.
(3) Focus on regional networks. Investing in and scaling Regional Clean Hydrogen Hubs will enable large-scale clean hydrogen production close to high priority hydrogen users, allowing the sharing of a critical mass of infrastructure. Also, these investments will drive scale in production, distribution, and storage to facilitate market liftoff. Properly implemented, these regional networks will create place-based opportunities for equity, inclusion, and sustainability. Priorities will include reducing environmental impacts, creating jobs – including good-paying union jobs – securing long-term offtake contracts and jumpstarting domestic manufacturing and private sector investment.
While Congress required the U.S. Department of Energy (DOE) to develop this national strategy and roadmap, activities will include collaboration across multiple federal agencies including the U.S. Departments of Agriculture, Commerce, Defense, Energy, Interior, Labor, State, Transportation, and Treasury, the Environmental Protection Agency, the National Aeronautics and Space Administration, the National Science Foundation, and the Office of Science and Technology Policy, in close coordination with the Executive Office of the President.
Federal agencies will also collaborate with industry, academia, national laboratories, local and Tribal communities, the energy and environmental and justice communities, labor unions, and numerous stakeholder groups to accelerate progress and market liftoff.
This roadmap establishes concrete targets, market-driven metrics, and tangible actions to measure success across sectors. Prioritising community engagement and use of community benefits plans will also be key to address potential environmental concerns and ensure equity and justice for overburdened, underserved, and underrepresented individuals and communities.
Legislative language provides clarity for the private sector
The goals set forth in this strategy aim to deliver the maximum benefits of clean hydrogen to the American people and the global community. 2U.S. National Clean Hydrogen Strategy and Roadmap Legislative Language.
This report responds to the legislative language set forth in Section 40314 of the Infrastructure Investment and Jobs Act (Public Law 117-58), also known as the Bipartisan Infrastructure Law, specifically that which amends Title VIII of the Energy Policy Act of 2005 (EPACT-2005) by adding Section 814 – National Clean Hydrogen Strategy and Roadmap.
Section 814 states: (A)DEVELOPMENT.— (1)IN GENERAL.—In carrying out the programs established under sections 805 and 813, the Secretary, in consultation with the heads of relevant offices of the Department, shall develop a technologically and economically feasible national strategy and roadmap to facilitate widescale production, processing, delivery, storage, and use of clean hydrogen.
(2)INCLUSIONS.—The national clean hydrogen strategy and roadmap developed under paragraph (1)shall focus on— (a)establishing a standard of hydrogen production that achieves the standard developed under section 822(a), including interim goals towards meeting that standard; (b) (i)clean hydrogen production and use from natural gas, coal, renewable energy sources, nuclear energy, and biomass; and (ii)identifying potential barriers, pathways, and opportunities, including Federal policy needs, to transition to a clean hydrogen economy.
