Hope persists in local hydrogen clean energy centers

In the heart of the Pacific Northwest, plans for a significant hydrogen hub project are facing an uncertain future. The project, expected to create over 10,000 jobs in the region, is one of seven Regional Clean Hydrogen Hubs that received funding from the Bipartisan Infrastructure Law in 2023.

Republican state legislators in Washington have written a letter to Chris Wright, urging him to continue funding for the Pacific Northwest Hydrogen Hub. The project is projected to receive around $1 billion from the federal government, a crucial investment for its success.

However, the future of this funding remains in limbo. The Senate Finance Committee's draft reconciliation bill proposes terminating the 45V tax credit, a key incentive for clean hydrogen production, at the end of 2025. This move could potentially stall the progress of the hydrogen hub projects, with very few expected to break ground by the end of this year.

The 45V tax credit provides up to $3 per kilogram of clean hydrogen produced, based on the carbon intensity of production. The size of the hydrogen hub projects varies, with some costing up to $1.2 billion. If successful, these projects have the potential to produce at least a third of the U.S.' 2030 hydrogen production goals.

The Pacific Northwest Hydrogen Hub, like other projects, is not immune to the delays in finalizing the 45V tax credit rules. This long delay has caused a significant hurdle for many projects, including the Pacific Northwest Hub.

The Trump administration previously ordered the Department of Energy (DOE) to compile a "hit list" of projects funded by the Inflation Reduction Act, which included all seven hydrogen hubs. However, the administration led by Secretary Jennifer Granholm, when the funding was allocated, has largely targeted smaller projects, including those targeting heavy industry.

The Office of Clean Energy Demonstrations, which managed more than $20 billion in large-scale, first-of-a-kind projects, was gutted under the leadership of Elon Musk and his Department of Government Efficiency. An employee who took the "deferred resignation program" offer believes the hydrogen hub projects will falter due to the loss of personnel and support.

The Regional Clean Hydrogen Hubs, including the Pacific Northwest Hub, recently wrote a plea to the Senate, urging them to preserve the 45V tax credit for projects that start construction through 2029. The hubs span 16 states, from the Pacific Northwest and California to Houston and Appalachia.

The fate of these projects, and the jobs and economic benefits they promise, hangs in the balance as the Senate considers the proposed changes to the 45V tax credit. The Pacific Northwest Hydrogen Hub, with its potential to revolutionise the region's energy landscape, awaits a decision that could determine its future.