The bipartisan infrastructure bill headed for a Senate vote includes provisions for "clean hydrogen" hubs that would use fossil fuels, Bloomberg reported Monday.
The bill earmarks $8 billion to build at least four "regional clean hydrogen hubs" that would produce hydrogen for uses such as heating, manufacturing and transportation.
At least two of these hubs would be located in regions "with the greatest natural gas resources," according to the bill, and renewable energy, nuclear energy, and biomass are discussed as potential energy sources. However, so is coal.
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As Bloomberg points out, hydrogen can be stripped from water using electrolyzer devices, which seems to be the plan here, as the bill also includes $1 billion for grants to improve the efficiency of these devices. But that requires a lot of electricity, and the source of that electricity can affect the overall environmental impact of hydrogen production.
If the electricity comes from renewable sources, the hydrogen-production process does not generate greenhouse-gas emissions, Bloomberg noted. This so-called "green hydrogen" is currently more expensive than hydrogen produced using natural gas, but costs are expected to fall within a decade, to the point where green sources cost less than fossil fuels, according to Bloomberg. That in turn could make coal-powered hydrogen hubs uncompetitive.
A 2020 IHS Markit study predicted that green hydrogen produced using renewable energy could be cost-competitive with hydrogen made from natural gas by 2030. The California Energy Commission came to a similar conclusion, saying in its own 2020 report that hydrogen fuel-cell cars could reach price parity with gasoline by 2025.
2021 Hyundai Nexo
That's a more encouraging picture than just a few years ago. A 2014 University of California-Davis study predicted that cheap natural gas would be needed to make hydrogen cost competitive with gasoline.
Hyundai has been one of the biggest cheerleaders for a big-picture hydrogen policy, and has cited a McKinsey analysis suggesting hydrogen (assumed to be green in this analysis) could make up 18% of global "final energy demand" by 2050.
However, infrastructure remains a big barrier— and that's led to some very creative proposals on how to transport hydrogen from clean energy sources to end points—including using the existing fossil-fuel infrastructure.