The Industrial Innovation Initiative (I3) and partners at Clean Air Task Force (CATF), the Bipartisan Policy Center (BPC), and the Information Technology and Innovation Foundation (ITIF), hosted its first in-person convening of participants and industrial decarbonization stakeholders on June 8, 2022, in Washington D.C. This event, Hubs on the Horizon: Scaling Carbon and Hydrogen Decarbonization Solutions, served as a forum to discuss the latest developments and announcements from the US Department of Energy (DOE) regarding clean hydrogen and carbon capture hubs funding and programs. The event also showcased and socialized efforts across the US to establish hydrogen and carbon management hubs while gaining insights from key industrial and state perspectives to establish hydrogen and carbon management hubs while gaining insights from key industrial and state perspectives.
I3 dedicated this convening to exploring the many-faceted opportunities presented by the Carbon and Hydrogen Hubs projects funded in the Bipartisan Infrastructure Law, passed last fall. The Bipartisan Infrastructure Law made a historic investment of $11.5 billion dollars for hydrogen and carbon management hubs. Developing and deploying these multi-state, multi-sector hubs in the next few years will be central to quickly scaling projects and meeting US midcentury climate goals for a net-zero economy. Sharing information, insights, and lessons learned among stakeholders will ensure that all ships rise as we work to decarbonize the vital, but challenging industrial sector.
You can watch the full event recording here, or read the highlights from specific panels below.
The event began with presentations from two I3 in-house experts: Angela Anderson, Director of Industrial Innovation and Carbon Removal at the World Resources Institute, and Matt Fry, Senior Policy Manager for Carbon Management at the Great Plains Institute.
Anderson presented a level-setting overview of current Carbon and Hydrogen Hubs legislation and announcements prior to the deeper dives slated for later in the day. This summary included key definitions around what a hydrogen hub is (a network of clean hydrogen producers, potential clean hydrogen consumers, and connective infrastructure located in close proximity) and what is considered “clean” by the under current DOE guidance (hydrogen produced with a carbon intensity of two kilograms of carbon dioxide-equivalent or less per kilogram of hydrogen produced). Anderson also outlined high-level information from the Requests for Information released earlier this year, the Notices of Intent for direct air capture hubs released in May and hydrogen hubs released in early June, and the projected timeline for hydrogen and carbon funding announcements for direct air capture hubs released in May and hydrogen hubs released in early June, and the projected timeline for hydrogen and carbon funding announcements.
Fry then presented various research and analysis from GPI, starting first with a study from 2020 titled, Transportation Infrastructure for Carbon Storage, which details U.S. opportunities for carbon capture and the associated infrastructure buildout necessary to achieve scale. The report was expanded to look more specifically at opportunities for co-locating carbon clusters or hubs with clean hydrogen hubs in the 2022 report, An Atlas of Carbon and Hydrogen Hubs for United States Decarbonization. The Atlas used a variety of criteria to identify 14 potential regional hub locations. Finally, Fry presented a preview of an upcoming decision support tool which considers environmental, social, and political constraints when planning or citing a project. presented a preview of an upcoming decision support tool which considers environmental, social, and political constraints when planning or citing a project.
Federal Guidance: Keynote Address with Dr. Jennifer Wilcox
This introduction was followed by the keynote presentation for the day. Dr. Jennifer Wilcox, Principal Deputy Assistant Secretary for the Office Fossil Energy and Carbon Management (FECM) at the US Department of Energy, joined virtually and began her presentation with an overview of the current organization of offices at DOE. Formerly the Office of Fossil Energy, the addition of Carbon Management to the Office’s title signals a significant shift in strategy and priority, as their mission is now to “minimize environmental and climate impacts of fossil fuels from extraction to use.” FECM’s most recent Strategic Vision focuses on 1) advancing carbon management approaches toward deep decarbonization, 2) advancing technologies that lead to sustainable energy resources, and 3) advancing justice, labor, and engagement. 1) advancing carbon management approaches toward deep decarbonization, 2) advancing technologies that lead to sustainable energy resources, and 3) advancing justice, labor, and engagement.
Dr. Wilcox then dove into the need for Carbon Capture and Storage (CCS) and Carbon Dioxide Removal (CDR) to work in parallel to mitigate emissions and support the full suite of technical and natural climate solutions necessary to achieve the DOE’s Carbon Negative Earth Shot. Direct Air Capture Hubs are one such solution for which DOE has dedicated significant investments. A funding announcement for the $3.5 billion secured in the Bipartisan Infrastructure Law is expected sometime between July and September of this year. . Direct Air Capture Hubs are one such solution for which DOE has dedicated significant investments. A funding announcement for the $3.5 billion secured in the Bipartisan Infrastructure Law is expected sometime between July and September of this year.
In addition to more direct carbon management solutions, Dr. Wilcox outlined the first of the Energy Earth Shots: Hydrogen Shot. The goal of Hydrogen Shot is to accelerate technological and economic breakthroughs for abundant, affordable, and reliable clean energy. It seeks to bring hydrogen costs down to one dollar per kilogram of hydrogen within the next decade. A significant step toward that ambitious goal is standing up regional clean hydrogen hubs. The Bipartisan Infrastructure Law secured $8 billion to establish at least four regional clean hydrogen hubs in different US regions, using a diversity of feedstocks, and supplying a variety of end users, with the overall goal of improving clean hydrogen production, delivery, storage, and end use. The funding announcement for this project is expected in September or October of this year. ubs. The Bipartisan Infrastructure Law secured $8 billion to establish at least four regional clean hydrogen hubs in different US regions, using a diversity of feedstocks, and supplying a variety of end users, with the overall goal of improving clean hydrogen production, delivery, storage, and end use. The funding announcement for this project is expected in September or October of this year.
Dr. Wilcox concluded her presentation by introducing the newly established Office of Clean Energy Demonstrations (OCED), which will build upon existing DOE investments in clean energy and increase the Department’s capacity to partner with industry leaders. Projects that FECM and OCED are coordinating include Hydrogen Hubs, Carbon Capture Demonstrations and Large Pilots, and Carbon Dioxide Transportation Infrastructure Finance and Innovation Program Account (with additional coordination from the DOE Loan Programs Office (LPO)).
Federal Guidance: OCED and LPO Hubs Implementation Panel with Melissa Klembara and Matt Kittell
Hubs on the Horizon continued the federal conversation with a roundtable moderated by Xan Fishman, Director of Energy Policy & Carbon Management at BPC. Melissa Klembara, Deputy Director for Portfolio Strategy at the Office of Clean Energy Demonstrations, and Matt Kittell, Senior Investment Officer at the Loan Programs Office, each presented an overview of their respective offices and work on hub development. Fishman then led a moderated question and answer session with both prepared questions and questions from the audience. Fishman then led a moderated question and answer session with both prepared questions and questions from the audience.
First to present was Klembara. She informed participants that the OCED was established in December of 2021 to deliver the $21.5 billion provided by the Bipartisan Infrastructure Law to support large-scale clean energy demonstration projects. Their mission is to deliver clean energy demonstration projects at scale in partnership with the private sector to launch or accelerate market adoption and deployment of technologies. Further, OCED aims to support the equitable transition to carbon-free electricity by 2035 and a net-zero economy by 2050.
The law more than triples the DOE’s annual funding for energy programs and significantly expands DOE’s ability to fill the critical innovation gap on the path to the achieving US climate goals by midcentury. Melissa further explained how OCED fits into other DOE offices and phases of technology commercialization, taking on more of the market risk of demonstration, compared to the technical and project risk of research and development, or the largely risk adverse deployment stage. This higher risk tolerance allows projects to push the envelope and encourages private investment in clean energy demonstrations by requiring a minimum cost-share of 50 percent.
Kittell continued the conversation with a presentation centered on the Carbon Dioxide Infrastructure Finance and Innovation Act (CIFIA). CIFIA authorizes $2.1 billion in credit subsidy for common carrier CO2 transportation infrastructure. Kittell broke some of that terminology down for the audience, explaining that the $2.1 billion “credit subsidy” is the net-present value estimate of the long-term cost to the government of the credit instrument, implying a significantly higher lending authority (in the ballpark of $20 billion minus potential grants). “Infrastructure” under CIFIA includes pipelines, shipping, rail, and other forms of infrastructure or equipment suitable for transporting CO2 from point sources or ambient air.
To bridge the necessary technical and industry expertise of FECM with the project finance expertise and loan service infrastructure of LPO, the two offices are coordinating efforts. Currently, LPO is conducting stakeholder outreach and developing guidance documents in preparation for CIFIA’s target launch in October of this year. Selection criteria includes having 1) an eligible project, 2) the reasonable prospect of repayment, 3) siting: in proximity to carbon infrastructure and where there is local support, and 4) a readiness to proceed. These criteria ensure projects are well developed, carry low risk, and can begin construction promptly after closing on DOE financing.
States and Industry: Regional Coordination on Hydrogen Hubs
The afternoon sessions turned first to established multi-state hubs collaboratives. Moderated by Emily Kent, Policy Manager of Zero-Carbon Fuels at Clean Air Task Force. Panelists shared insights from newly formed multistate collaborations actively pursuing hydrogen hub funding, including the challenges and opportunities working across state lines, and the merits of each regional framework, respectively. This session featured Jason Lanclos, Director of the State Energy Office for the Louisiana Department of Natural Resources; Julie Link, Chief Administrator of Environment for the Arkansas Department of Energy & Environment; Doug Scott, Vice President of Electricity and Efficiency at Great Plains Institute; and Bryan Willson, Energy Institute Director at Colorado State University.
Representing the HALO Hydrogen Hub – consisting of Louisiana, Oklahoma, and Arkansas –Lanclos and Link discussed the challenges of establishing a climate task force and securing private-sector partnerships for decarbonization in the Gulf Coast. The Gulf Coast is continually facing the negative impacts of climate change with rapid coastline loss and increasingly frequent severe storms. The need for durable climate solutions in this vulnerable and heavily industrialized region is critical to support the continued health, safety, and economies of these states. Federal support by way of hydrogen hubs, 45Q tax credits, and other industrial decarbonization incentives offer a powerful way to bring together the federal, state, and private sectors in a regional context.
In addition to having a vested interest in industrial decarbonization and avoiding the worst impacts of climate change, the HALO states are also uniquely well suited to house this kind of investment. As one of the largest steel producing states in the country, Arkansas has an ample market for potential hydrogen off-takers. This region also boasts a diversity of low-carbon power sources for hydrogen production, from widespread nuclear power to wind, both on- and off-shore. Should this region secure a hub, it will unlock private-sector investment in a way that overcomes otherwise challenging political barriers.
Willson joined the conversation on behalf of the Rocky Mountain Alliance for Next Generation Energy (RANGE), who are working to support the establishment of the Western Inter-State Hydrogen Hub (WISHH). WISHH consists of Colorado, New Mexico, Utah, and Wyoming. All four of these states are historic oil and gas producers with ambitious climate and carbon goals and a host of resources to support those ambitions. Willson emphasized the value of partnerships between WISHH, the region’s top research universities, and the national laboratories to ground these projects in research and the best available science.
The WISHH region has significant renewable energy resources and Wyoming is one of the few states with Class VI primacy for carbon storage. While making up a geographically large portion of the country, these four states have a relatively low population density and fewer likely off-takers. However, WISHH has the potential to connect the West Coast to the Midwest and Gulf Coast through transport networks. The vision is by stitching the hubs together into a national network, we can make use of each hub’s resources and connect to markets outside a given region.
Scott spoke to attendees about the pending Midwest regional hydrogen hub project, consisting of states yet to be announced. The stakeholders involved are currently working to produce a memorandum of understanding among interested states, universities and labs, and private companies. Hydrogen has long been a topic of interest throughout the Midwest as the region is home to a myriad of potential off-takers, from industry to agriculture. Agriculture is an early focus of the project, as ammonia for fertilizer already represents a significant portion of the hydrogen economy; however, ample opportunities exist for use in decarbonizing industries such as steel, refining, and ethanol production. Additionally, the upper Midwest region can support cross-national transportation of hydrogen (and eventually use for heavy transportation) as Chicago is a major rail hub with significant trucking and shipping capabilities.
Attendees raised questions around some of the most significant challenges to hubs development, including permitting and the need for state and community buy-in. Consistent communication and cross-cutting collaboration among companies, communities, states, regions, and the federal agencies responsible for hubs program implementation was highlighted as vital to positioning states for successful projects.
States and Industry: Positioning States for Successful Hubs Projects
The final session of the day began with presentations from David Edwards, Director and Advocate for Hydrogen Energy at Air Liquide, and Michael Turner, Director of Buildings and Finance for the Colorado Energy Office. Angela Seligman, US State Policy and Advocacy Manager at CATF introduced both speakers and moderated the participant discussion to follow.
Edwards rose to the challenge of representing industry in an otherwise state and federally focused day with his presentation on Air Liquide and the role of hydrogen in the energy transition. Air Liquide is an international industrial gas company, selling oxygen, nitrogen, argon and rare gases, hydrogen, helium, carbon dioxide, and carbon monoxide. This expertise means Air Liquide has been in the carbon and hydrogen games for years. In the case of hydrogen, the company has nearly 50 years of production, distribution, and sales to its name. In addition to supplying the means for other industries to cut emissions, Air Liquide has committed to decarbonizing their own operations with a carbon reduction goal of 33 percent by 2035, reaching carbon neutrality by 2050.
Air Liquide has two major hydrogen projects in North America: one in Nevada, and one in Bécancour, Quebec, Canada. The brand-new Nevada project is the first large scale renewable liquid hydrogen production plant, dedicated to hydrogen energy markets. The plant consists of a reformer and a liquefier with a capacity of about 30 tons per day. They began operations and delivery in 2022. The Bécancour plant, despite having a capacity of about 8 tons per day, is actually the world’s largest Polymer Electrolyte Membrane (PEM) Electrolyzer, supplying 100 percent decarbonized hydrogen to Canada and the East Coast markets. This plant consists of a reformer, electrolyzer, purifier, and liquefier in a single hub, so to speak.
Turner spoke next, outlining some of the steps Colorado has taken to make the state welcoming to carbon capture, utilization, and storage (CCUS) projects, including hubs. This endeavor was undertaken primarily by the Colorado CCUS Task Force, launched in early 2021. Over the last year and a half, the task force developed and presented a suite of recommendations to the Governor’s office. Their recommendations include developing CCUS with an emphasis on environmental justice, coordination and permitting with federal agencies and regional partners, revisiting the state agency permitting process, securing state incentives, and considerations for the siting of carbon dioxide pipelines and projects.
The task force identified securing Class VI well primacy for the state as a key step to safe and successful CCUS project development. Presently, only Wyoming and North Dakota have this primacy, so such a move would establish Colorado as a leading state in this space. Environmental justice considerations and partnerships between the private and public sectors were also emphasized as key to project success. The state of Colorado currently has two demonstration projects, one in Sterling and one in Yuma, from which they can learn best practices and share success stories.
In discussion with both presenters, it became clear that long-term investment viability is dependent on companies feeling secure that the states they house projects in are prioritizing regulatory stability and have a long-term vision for the state’s energy mix.
We are at a critical moment for carbon management and clean hydrogen investments in the US. With unprecedented funding and interest in these decarbonization solutions, bringing diverse stakeholders together to think across sectors is crucial. The Industrial Innovation Initiative is proud to serve as a bridge for information and dialogue between key decision-makers and industry, power, labor, and environmental stakeholders working toward the rapid and durable advancement of carbon management and clean hydrogen solutions needed to cut emissions from industrial sectors.