Since the release of the proposed regulations for the Section 45V Clean Hydrogen Production Tax Credit, stakeholders across the hydrogen value chain have been heavily focused on submitting comments and providing testimony to shape the final regulation. This public engagement process concluded at the end of March. Now, we await the final regulation, which could come as early as this summer.

However, while most of the attention was focused on 45V, the Administration made significant progress advancing other hydrogen-related programs from the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) that will be essential to establishing a viable domestic hydrogen ecosystem.

In this newsletter, we’ll take a look at recent federal actions that will help support the establishment of a domestic clean hydrogen ecosystem.

BIL and IRA Funding Begins to Flow:

The BIL and IRA represented unprecedented federal investments for the hydrogen industry. Since becoming law, the Administration has made steady progress implementing these provisions, with project awards being announced over the past couple months. These include:

Clean Hydrogen Electrolysis, Manufacturing, and Recycling Program:

The Department of Energy’s (DOE) announced $750M of awards for 52 hydrogen projects in 24 states. These projects aim to advance electrolysis technologies and enhance recycling and manufacturing for clean hydrogen systems, which will create over 1,500 jobs. DOE anticipates this program will boost U.S. manufacturing capacity to 14 GW of fuel cells, which is enough to power 15% of medium- and heavy-duty trucks sold each year, and 10 GW of electrolyzers annually, which could generate an extra 1.3 million tons of clean hydrogen annually.

The projects selected for funding focus on the following areas:

• Low-Cost, High-Throughput Electrolyzer Manufacturing (8 projects, $316 million): These projects aim to scale innovative electrolyzer designs, as well as enhance manufacturing process efficiencies.
• Electrolyzer Component and Supply Chain Development (10 projects, $81 million): These projects will focus on the development and manufacturing of key components within the electrolyzer supply chain, including catalysts, membranes, and porous transport layers.
• Advanced Technology and Component Development (18 projects, $72 million): These projects will focus on novel materials, components, and designs for electrolyzers that can enable cost reductions and meet performance metrics in order to reduce supply chain risks.
• Advancing Manufacturing of Fuel Cell Assemblies and Stacks (5 projects, $150 million): These projects will support high efficiency manufacturing of low-cost fuel cells in the United States.
• Fuel Cell Supply Chain Development (10 Projects, $82 Million): These projects will focus on developing technologies that address deficiencies in the fuel cell supply chain and reduce the need to rely on PFAS, or “forever chemicals.”
• Recovery and Recycling Consortium (1 project, $50 million): This funding will create a consortium of industry, academia, and national labs focused on developing recycling techniques for hydrogen.

Industrial Demonstrations Program:

This program provides $6 billion in funding to 33 industrial projects across 20 states that will help lower emissions within the hard-to-abate sectors, including seven chemicals projects, six cement and concrete projects, six iron and steel projects, five aluminum and metals projects, three food and beverage projects, three glass projects, two process heat projects, and one pulp and paper project. In addition to funding for clean hydrogen as a fuel and feedstock, the awards will also fund energy efficiency and electrification solutions. The DOE expects the projects to result in a total reduction of 14 million metric tons of carbon dioxide annually.

Qualifying Advanced Energy Project Tax Credit:

The DOE announced $4 billion of 48C tax credits to 100 projects across 35 states, which aims to accelerate domestic clean energy manufacturing and reduce industrial sector emissions. This is the first round of allocations. The credits will be issued under the following project categories:

• Clean energy manufacturing and recycling ($2.7 billion): Focused on manufacturing of electrolyzers, fuel cells, subcomponents, grid technologies, electric vehicle battery components, nuclear power, solar PV, and wind energy technologies.
• Critical materials recycling, processing, and refining ($800 million): Focused on hydrogen’s steel applications, lithium-ion battery recycling, and rare earth projects.
• Industrial decarbonization ($500 million): focused on decarbonizing chemicals, food and beverage, pulp and paper, biofuels, glass, ceramics, iron and steel, automotive manufacturing, and building materials.

National Zero-Emission Freight Corridor Strategy:

The Administration unveiled the National Zero-Emission Freight Corridor strategy, which was developed by  DOE, DOT, and EPA. The strategy aims to develop charging and hydrogen refueling infrastructure to support zero-emission medium- and heavy-duty vehicles through 2040. The strategy outlines a four-phased approach:

1. Establishing priority hubs based on freight volumes (2024-2027).
2. Connecting hubs along critical freight corridors (2027-2030).
3. Expanding corridor connections to initiate network development (2030-2035).
4. Achieving a national network by linking regional corridors for widespread access (2035-2040).

The Bottom Line:

Despite the continuing efforts to finalize 45V regulations, funding from other BIL and IRA programs are beginning to flow towards electrolyzer, fuel cell, manufacturing, transportation, and industrial projects, which will be essential to the establishing the U.S. domestic hydrogen ecosystem – from production, distribution, and end-use, as well as the supply chain to support it all.

ICYMI: Clean Hydrogen in the News

• RealClearEnergy: Jumpstarting’ a Domestic Hydrogen Economy: Theory vs. Practice
• Bloomberg Tax: Tweak Emissions Accounting for Hydrogen Tax Credits, Groups Say
• Greater Houston Partnership: Houston Investing in Its Future Hydrogen Workforce with New Development Strategy