Pennsylvania Hydrogen Hubs Among Winners of $7 Billion in U.S. Grants

(Reuters) — Two hydrogen hubs projects partially located in Pennsylvania- one in the mid-Atlanic region and one in the Appalachian region — will receive part of $7 billion in U.S. federal grants that will be announced on Friday, sources familiar with the plan told Reuters on Wednesday.

President Joe Biden's administration plans to announce the winners of up to $7 billion in federal dollars from the Department of Energy that would set the U.S. on a path to produce 50 million metric tons of clean hydrogen fuel by 2050, a key part of its plan to decarbonize the U.S. economy by mid-century.

The hubs are networks of hydrogen producers and consumers that will use local infrastructure to accelerate the deployment of clean hydrogen.

Hydrogen currently accounts for about 1% of U.S. energy consumption and is largely produced with fossil fuels. The Biden administration wants clean hydrogen to replace fossil fuels like natural gas and coal to power factories and other hard-to-decarbonize sectors like cement and will unveil rules for accessing a lucrative hydrogen production tax credit at the end of this year.

The awards, taken together, mark a huge victory for Pennsylvania, a battleground state that will help decide whether Biden returns to the White House in 2024.

The Mid-Atlantic Clean Hydrogen Hub that involves parts of Pennsylvania, Delaware and New Jersey will receive a $750 million grant, according to the sources familiar with the forthcoming announcement. Biden will celebrate the announcement on Friday during a visit to Philadelphia, the sources said.

The Appalachian Regional Clean Hydrogen Hub (ARCH2) that includes western Pennsylvania, Ohio and West Virginia will also receive one of the grants, according to two sources. The hub was backed by Democratic Senator Joe Manchin.

The announcement on Friday will cap months of intense political jockeying among states from California to Pennsylvania for their share of the $7 billion.

The 2021 bipartisan infrastructure bill allocated up to $7 billion to launch the initiative, called the Regional Clean Hydrogen Hubs program, which will help fund six to 10 regional clean hydrogen hubs across the U.S.

In 2022, 79 applicants sent letters of interest to the Energy Department for the hub grants. By January, the DOE had selected 33 teams to move forward. In many cases, states joined together to make joint applications.

Each of the proposed regional hub projects involve dozens of partners from energy companies, academia and local and state governments.

The MACH 2 project's partners include chemical giants Dupont and Braskem, industrial gas firm Air Liquide, oil pipeline company Enbridge, refinery firm PBF, the city of Philadelphia and the public transit systems of Delaware and southeast Pennsylvania.

ARCH 2 partners include EQT, the largest U.S. gas producers, electric utility Dominion, engineering firm Battelle, hydrogen firm Plug Power, chemical firm Chemours, pipeline firm TC Energy as well as Air Liquide.

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