U.S. Stakeholders Make Their Moves as Global Green Hydrogen Race Takes Shape

Oil and gas producers outside of Russia have benefitted from Russian President Vladimir Putin’s decision to attack Ukraine. Over the long run, though, this latest example of authoritarian overreach has spurred a new appreciation for the geopolitical benefits of green hydrogen, which provides wind turbines and solar panels with new opportunities for energy storage, transportation and usage.

Green hydrogen and equitable energy distribution

The falling cost of wind and solar energy has opened the door to a more equitable distribution of energy resources around the globe. That trend has already taken hold in the U.S., where a new green hydrogen industry is beginning to leverage growth in the wind and solar power industries.  

The Northeast states, for example, are thin on recoverable fossil energy resources, but they do have access to vast offshore wind resources. That creates an opportunity to produce hydrogen locally. Electricity from offshore wind farms can power electrolysis systems, which push green hydrogen from water (by popular consensus, hydrogen from renewable resources is called “green,” to distinguish it from fossil-sourced hydrogen).

The Northeast states of New York, New Jersey, Connecticut, Massachusetts, Maine and Rhode Island have already formed a consortium to accelerate the development of a sustainable H2 industry in the region, leading to new economic opportunities.

Energy equity across the U.S.A.

The Northeast consortium is competing for a share of $8 billion in Energy Department funding under the agency’s new “Hydrogen Hub” program. The Hydrogen Hub program incentivizes states across the U.S. to pool their resources for hydrogen production, transportation, storage and usage.

Under the current state of affairs, the vast majority of hydrogen is produced from natural gas, so states without gas reserves would be out in the cold. The Hydrogen Hub program supports alternative sources including water electrolysis as well as biogas, landfill gas and industrial wastes, among others.

If all goes according to plan, states without fossil resources will be able to participate more fully in the hydrogen economy. That  includes fuel and fertilizer production as well as food processing  pharmaceuticals and other key sectors that rely on hydrogen as an industrial input.

More green hydrogen for the Midwest

Funding for the Hydrogen Hub program comes from last year’s Bipartisan Infrastructure Law. The law requires the Energy Department to select a half-dozen or so regional hydrogen hubs for funding. By law, part of that funding pot must go to produce hydrogen from natural gas and other fossil fuel resources. Nevertheless, alternative sources are the main thrust of the program.

In past years, the focus on alternative sources would have been stymied by a bottleneck. To this day, few facilities in the U.S. are capable of producing hydrogen from alternative sources. That situation is rapidly changing as investor interest in the green hydrogen field grows. There is now thriving ecosystem populated by legacy firms alongside startups that are poised to jump on new opportunities to deploy financial support from the government and the private sector.

The depth of the emerging green hydrogen economy is illustrated by the Midwest Alliance for Clean Hydrogen, or MachH2 for short. MachH2 is competing for Energy Department funding to establish a hydrogen hub spearheaded by Illinois and Michigan. Their pitch for funding rests squarely on water electrolysis, deploying the region’s nuclear energy assets as well as renewable energy.

Mach2 officially launched on November 3 with an explicit climate action mission, to differentiate itself from other contenders that continue to rely on fossil resources.

“MachH2 is a multistate coalition of public and private entities representing every phase in the hydrogen value chain,” the organization explains. “The alliance includes a cross-section of carbon-free energy producers, clean energy developers, hydrogen technology providers, utilities, major manufacturers, national labs and leading hydrogen technology development and deployment institutions, world-class universities, and groups focused on environmental justice.”

The organization also emphasizes that its members are committed to “promoting equity and furthering the administration’s Justice40 goals through the development of the hub.”

Michigan and Illinois policy makers are lending considerable muscle to the effort, through their states’ public research universities and other institutions. 

The long list of private sector partners includes diversified legacy companies with roots in the 20th century such as Air Liquide, Atlas Agro, Rockwell Automation and the energy firm Michaels. The startup side is represented by businesses focusing more specifically on sustainable hydrogen, including Bloom Energy, Gevo and Lanzajet, an offshoot of the company LanzaTech.

The U.S. green hydrogen industry and global affairs

The Biden administration’s focus on climate action and environmental equity dovetails with a broader recognition that peaceful coexistence among nations is impossible under a fossil energy scenario. 

The entanglement of energy policy with impacts on water resources and agriculture adds more fuel to the fire, as amply illustrated by Russia’s unprovoked attack on Ukraine.

So far, much of the media attention has focused on the vulnerability of Europe to fuel interruption. However, the continent of Africa is at even greater risk, due to the dependence of the global food supply on the Ukrainian agriculture industry.

Against this backdrop, it is no surprise to see the United Nations Office of the Special Advisor on Africa promoting green hydrogen for carbon-free economic development. As applied to Africa, the development of a green hydrogen economy could help shield the continent from the geopolitical maneuverings of Russian and other global superpowers. It provides a pathway towards economic independence, including access to fertilizer from renewable resources.

A new report from Masdar, the innovative state-owned venture of Abu Dhabi, also underscores the potential for an exportable, sustainable H2 industry in Africa. 

Here in the U.S., private sector stakeholders are working to grow the domestic market for green hydrogen. Continued support from the Biden administration and Congress will help ensure that America is on track to play a leading role in this emerging industry, but that is only guaranteed up to Election Day 2024. After that, anything can happen.

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