Exxon, Amazon awarded slice of $7 billion federal funding for U.S. hydrogen projects

(Bloomberg) – Hydrogen projects involving Amazon.com Inc., Exxon Mobil Corp. and Air Products and Chemicals Inc. are among those receiving portions of $7 billion in U.S. funding meant to make the country a leader in the fuel.

President Joe Biden and Energy Secretary Jennifer Granholm are set to announce the seven projects — stretching from Pennsylvania to California — that have been selected as recipients of the government backing. The official announcement will be made at the Port of Philadelphia, which the administration said would use hydrogen from a hub proposed for portions of Pennsylvania, Delaware and New Jersey to fuel trucks and other heavy-duty equipment.

The Biden administration is throwing its weight behind hydrogen and the hubs — broad networks of hydrogen producers and consumers spanning multiple states — as part of its goal of reaching net-zero emissions by 2050. While almost no hydrogen is currently produced in the U.S, that figure could increase to 10 million metric tons by 2030, according to an Energy Department report. The administration has started an effort to reduce costs — one of the biggest barriers to hydrogen’s widespread use — by 80% to $1 a kilogram by 2030.

The Pennsylvania hub where the announcement is being made will receive up to $750 million in funding and will use existing oil infrastructure to produce hydrogen from both renewable and nuclear energy, according to the White House. Project partners include refiner PBF Energy Inc. and Air Liquide SA.

Other winners include as much as $1.2 billion for a California-based project that will produce hydrogen exclusively from renewable energy and biomass and is aimed at decarbonizing public transportation, heavy-duty trucking and port operations. Project partners include Amazon and Air Products.

A hydrogen hub backed by Senator Joe Manchin spanning parts of West Virginia, Ohio and Pennsylvania that is partnering with natural gas producer EQT Corp., is receiving up to $925 million and will produce hydrogen using natural gas with carbon capture, according to the White House.

A Gulf Coast hydrogen hub centered in Houston and backed by companies including Exxon and Chevron Corp. was awarded as much as $1.2 billion. A hub proposed by a coalition of Midwest states that would be partially powered by nuclear energy to provide hydrogen for uses including steel and glass production was awarded up to $1 billion. Project partners include utility Exelon Corp. and reactor operator Constellation Energy Corp.

The hydrogen hub awards, which were funded in 2021’s bipartisan infrastructure law, mark the culmination of a furious race between states. The Energy Department in January urged 33 projects to submit full applications, after receiving 79 proposals.

In addition, the Biden administration has announced plans to award $1 billion to stimulate demand for hydrogen to provide “market certainty” and ensure demand.