Seven Midwest states with eyes on tapping into federal infrastructure funding are joining forces to promote the development of “clean” hydrogen technologies in the region to bolster their economies lower energy costs while reducing carbon-related emissions.
Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio and Wisconsin signed the memorandum of understanding this week creating the Midwestern Hydrogen Coalition with a stated goal of accelerating the development of clean hydrogen from production and supply chain to distribution in agriculture, manufacturing, transportation, and other industries. Four of the states’ governors are Democrats and two Republicans.
“Investments in the development of a robust clean hydrogen market, supply chain, and workforce have the opportunity to create good-paying jobs, expand economic opportunity, promote energy independence, and improve public health outcomes,” the MOU says. “The participating states recognize the Midwest has advantages in the production, transportation, and end-use of hydrogen to make investments in the hydrogen ecosystem attractive.”
Hydrogen releases only water as byproduct when used in a fuel cell to generate electricity.
While commercial hydrogen has historically been refined out of fossil fuels, there are high hopes for “green hydrogen” that uses renewable energy to create hydrogen by separating water molecules into hydrogen and oxygen.
The Midwest’s high concentration of manufacturing, transportation, and agriculture are viewed as potentially top beneficiaries of hydrogen power.
“Strong partnerships and collaborations with our neighbors will foster a robust hydrogen ecosystem that will spur future growth in Indiana,” the state’s governor, Eric Holcomb, said in a statement.
The Infrastructure Investment and Jobs Act provides $8 billion for the Regional Clean Hydrogen Hubs, or H2Hubs, program, which aims to establish four regional hubs across the country. The formal Notice of Funding Opportunity is expected to open in September or October.
This Midwestern Hydrogen Coalition said it would evaluate the possibility of pursuing one or more Hydrogen Hub applications, according to the MOU.
The IIJA also features $1 billion for the Hydrogen Electrolysis program to reduce the costs of hydrogen produced from clean electricity and $500 million for the Clean Hydrogen Manufacturing and Recycling program.
The programs are aimed at speeding up the use of hydrogen as a clean energy carrier as part of President Biden’s goal of reaching a 100% clean electrical grid by 2035 and net-zero carbon emissions by 2050.
The Department of Energy, headed up by former Michigan Gov. Jennifer Granholm, is implementing the hubs program, and has said it would select applications that prioritize employment and address hydrogen feedstock, end uses and geographic diversity.
The Inflation Reduction Act, signed into law in August, includes several tax credits designed to promote the clean hydrogen sector over the next 10 years. The IRA provides a new clean hydrogen production tax credit, broadens an existing investment tax credit to apply to hydrogen production and hydrogen storage projects, and provides direct-pay tax credits for project developers and sponsors.
The pact lays out the advantages the Midwest can argue in the case for securing federal funding.
The region has the largest hydrogen infrastructure network in the nation in the form of ammonia production, pipelines, and “nurse” tanks, given that ammonia is an ideal hydrogen carrier and has an established market and distribution/storage network for ammonia as an agricultural input, one of the primary existing end-uses for hydrogen.
Ammonia production, the vast majority of which is used as a fertilizer input to Midwest agricultural production, is the second largest market for hydrogen.
The region is also home to a high-volume multi-modal transportation network with a big potential for co-located gas and CO2 transport infrastructure and is home to concentrations of difficult-to-decarbonize industries “which are nationally and globally relevant,” the MOU says.
The participating states have also spearheaded use of green ammonia (wind to hydrogen to ammonia which can be used as a zero-carbon fuel, for long-duration energy storage, and as a way to transport hydrogen in large volumes, according to the MOU, which is not binding.
The MOU also lays out how states will work with commercial partners and universities and non-profits to evaluate strategic challenges and opportunities in developing clean hydrogen, green ammonia, and related low- and zero-carbon energy carriers and technologies and solutions.
“The creation of this coalition allows for a multi-state, multi-sector approach for leveraging each state’s unique assets,” Illinois Gov. J.B. Pritzker said.
The state last year adopted legislation that puts the state on a path to 100% clean energy by 2050.