President Joe Biden visits the Cummins Power Generation Facility as half of his administration’s Investing in America tour in Fridley, Minn., on Monday, April 3, 2023.
Elizabeth Flores | Star Tribune | Getty Images
President Joe Biden just lately accepted seven regional hydrogen hubs to receive $7 billion in federal funding supposed to spur the growth of “clear” hydrogen in the United States. Hydrogen, if produced in a method that doesn’t generate copious greenhouse fuel emissions, might be a vital device to decarbonize some significantly difficult segments of the economic system like heavy transport.
“Clean hydrogen is the Swiss Army Knife of zero-carbon options as a result of it may possibly do nearly every little thing: Powering vans, buses, and airplanes … Heating properties and fertilizing crops … Revolutionizing transport … And cleansing up America’s manufacturing trade,” Jennifer Granholm, head of the U.S. Department of the Energy, mentioned when she introduced the choice of the hubs earlier in October.
Of the seven hubs, two plan to use renewable vitality completely. The others will use a mixture of renewables, nuclear energy, and natural fuel with carbon seize and storage.
Putting federal cash behind a program to struggle local weather change whereas utilizing natural fuel, a fossil fuel, as one of its fundamental components could not appear intuitive.
Making hydrogen from natural fuel with carbon seize — referred to as “blue hydrogen” in the trade — isn’t essentially a local weather boondoggle, however the solely method it is constructive for the local weather is with cautious execution and ultra-rigorous oversight from the federal authorities.
“There are methane leakage dangers — so local weather dangers, air air pollution dangers. So as a result of of that, we have been fairly disenchanted to see such over-reliance on blue hydrogen in the hubs,” Rachel Fakhry, hydrogen coverage lead for the Natural Resources Defense Council, mentioned.
“These are hubs which are beneath direct Department of Energy oversight. So the Department of Energy has a large, large function and crucial to require these tasks to seize carbon at very excessive charges, to reduce verifiably methane leakage, to shield towards well being harms and, sure, you even have some guidelines round how the carbon seize tools is powered,” Fakhry advised CNBC.
It all relies on how the hydrogen is made
When hydrogen is burned or used in a fuel cell to generate electricity, water is the solely byproduct. Generating vitality from hydrogen this fashion doesn’t create carbon dioxide, one of the main greenhouse gases that causes international warming. Also, hydrogen is a vehicle for storing energy so it may be transported or used later.
Hydrogen in nature principally exists connected to different atoms, so producing pure hydrogen to use in any of these decarbonization options requires splitting molecules. The local weather impression of splitting these molecules to produce pure hydrogen varies dramatically.
Hydrogen may be made by splitting water, H2O, with a lot of electrical energy and a machine referred to as an electrolyzer. If the electrical energy that goes to energy that electrolyzer comes from sources that don’t emit any greenhouse fuel emissions, like wind generators or photo voltaic farms, then the hydrogen that comes out of the electrolyzer may be helpful from a local weather perspective.
At the similar time, making hydrogen with an electrolyzer powered by electrical energy from coal or different fossil fuels isn’t “clear” by any metric.
“There have been research that present that if you happen to run an electrolyzer on grid electrical energy, you would have greater than doubled the carbon depth of current grey hydrogen at present, relying on the place you are producing it. If you are working it off of a grid that does not have clear electrical energy, then that that would not be thought-about clear hydrogen both,” Emily Kent, who leads public coverage and schooling for hydrogen at the nonprofit assume tank, the Clean Air Task Force, advised CNBC.
Natural fuel can also be a supply of hydrogen. Natural fuel is mostly methane, and every methane molecule is one carbon atom bonded to four hydrogen atoms.
Currently, 95% of the hydrogen produced in the United States comes from an energy-intensive course of of splitting natural fuel with very high-temperature steam, according to the Department of Energy. Making hydrogen this fashion, referred to as “grey hydrogen” colloquially, releases carbon dioxide emissions that contribute to local weather change.
Making lower-carbon hydrogen from natural fuel requires, at minimal, utilizing point-source carbon seize expertise to scrub the carbon emissions from the manufacturing facility flues the place the steam-methane reforming is occurring.
U.S. President Joe Biden, accompanied by Energy Secretary Jennifer Granholm, participates in a tour of the Tioga Marine Terminal in Philadelphia, Pennsylvania, U.S., October 13, 2023.
Jonathan Ernst | Reuters
But how can hydrogen comprised of natural fuel be ‘clear’?
So, how can hydrogen comprised of natural fuel ever be thought-about “clear”?
First, it is a query of definitions.
“The phrase ‘clear’ does not essentially imply something. It’s variety of like once you use the phrase ‘natural’ for meals — it means one thing totally different to everybody,” mentioned Kent. “The clearest method to give it some thought is in phrases of carbon depth or greenhouse fuel depth of the hydrogen manufacturing.”
The federal authorities thinks about hydrogen manufacturing in technology-neutral phrases, Fakhry says. “So any expertise — fossil fuel derived, by way of electrolysis of water, by way of biomass — can technically rely as ‘clear’ so long as it meets a sure carbon-emissions restrict,” Fakhry says.
To wit, the Bipartisan Infrastructure Law, the place the funding for the hydrogen hubs comes from, particularly required that two of the chosen hydrogen hubs be positioned in natural gas-rich areas. (It additionally mentioned that one hub should use fossil fuels with carbon seize, one should use nuclear vitality and a third should use renewable vitality.)
Calculating the carbon depth for hydrogen comprised of natural fuel is difficult and can be barely totally different relying on which particular venture is being thought-about. But typically, to make low-carbon hydrogen from natural fuel, there should be excessive charges of carbon seize, restricted upstream methane leaks in the natural fuel provide chain, and the supply of the electrical energy used in the carbon seize course of wants to be low or zero carbon, says Kent.
“Minimizing the emissions throughout these three key areas may result in low-carbon hydrogen coming from natural fuel,” Kent advised CNBC.
Making hydrogen from natural fuel with carbon seize would require extra vitality and be costlier than producing hydrogen from natural fuel the place the extra carbon emissions simply spew into the ambiance. But it’s potential.
And Sean Heinroth, principal at Ernst & Young’s EY-Parthenon practice headquartered in Houston, gave CNBC a transient define of how hydrogen may be produced with natural fuel in a method that might be a carbon-neutral course of:
- Steam-methane reforming with out carbon seize (grey hydrogen) requires about 6.2 megawatt-hours of warmth vitality to produce 1,120 kilograms of hydrogen.
- Capturing 70% of the carbon emissions (blue hydrogen) related to making that very same amount of 1,120 kg of hydrogen requires about 10.2 MWh of warmth vitality whereas capturing 3.6 tons of carbon dioxide.
- Therefore, making blue hydrogen and capturing 70% of the emissions takes about a further 4 MWh per 1,120 kg of hydrogen produced. That’s practically a 40% improve in the vitality wanted.
But that further vitality requirement doesn’t essentially imply extra CO2 can be generated. That’s as a result of some of the hydrogen made in the steam-methane reforming course of can be utilized to energy the level supply carbon seize.
“Once the course of of producing blue hydrogen begins, it primarily turns into a closed loop course of and turns into carbon impartial, as a result of the hydrogen produced is used to energy the carbon seize expertise,” Heinroth advised CNBC.
While all that is potential, it might by no means occur at scale.
“Currently, blue hydrogen is produced at a very small scale in the U.S.,” Heinroth advised CNBC.
That is what the U.S. authorities is making an attempt to change with its hydrogen hubs program and the manufacturing tax credit score. Such a course of will take time, says Heinroth.
“In the context once more of the federal authorities, if you happen to can be sure that tasks have a very excessive share of carbon seize — so tasks are capturing not less than 90% of their carbon — and that they’re verifiably minimizing their methane leakage to lower than 1% — a lot lower than 1% truly, and placing in place some safeguards to reduce air air pollution and well being harms, then technically, that’s a venture that might have some local weather bona fides,” Fakhry mentioned.
“But the query stays, will tasks truly be required to obtain these excessive requirements?” Fakhry mentioned.
Hydrogen hubs could have to confirm their emissions to preserve their funding
The cash that Department of Energy awarded the seven hubs isn’t delivered in an upfront test.
The $925 million that the Heartland Hydrogen Hub was awarded, as an illustration, isn’t a direct cost, Tom Oakland, vitality analysis and growth supervisor at the North Dakota Department of Commerce, advised CNBC. The cash from the federal authorities can be dispersed as reimbursements for the tasks as they’re constructed over time, Oakland advised CNBC.
The Heartland Hydrogen Hub — which is able to embrace Montana, North Dakota, Minnesota and Wisconsin — is dedicated to spending $3 for each $1 in federal funding it receives.
“3 to 1 is fairly substantial. You’re getting 25% off, nevertheless it’s not prefer it’s simply free cash. They’ve bought to make a substantial funding on their very own,” Oakland advised CNBC.
The hydrogen hubs are in the very early planning phases, and at every stage, they may have to show their legitimacy, says Alex Kizer, a senior vice chairman at the Washington-based nonprofit vitality transition coverage store, the EFI Foundation.
“At every section, you are going to want to meet sure technical, financial, and neighborhood advantages necessities in order to obtain that funding. And one of these technical necessities is your emissions profile,” Kizer advised CNBC in a cellphone name on Monday. “If a venture is to obtain the early-stage funding from the Department of Energy beneath section one, it is going to want to show … that it may possibly meet and adjust to these necessities, or, in my estimation, it is not going to obtain future funding.”
Testing the technical feasibility and financial viability of varied pathways of producing low-carbon depth hydrogen is a worthy endeavor for the U.S. proper now, says Kizer.
“It’s so necessary that hubs be out there to consider and reveal all of these totally different choices, as a result of in our estimation, there is not a technique to produce hydrogen in a clear method. That does not imply that each one pathways are created equal, however having the hubs with these regional elements with these totally different applied sciences, exploring these varied configurations is so necessary for us to transfer up the studying curve on what our clear hydrogen future is,” Kizer advised CNBC.
But alongside the method, Fakhry and different climate-focused watchdog organizations are going to preserve urgent the Department of Energy to be extra clear than it has been up to now.
“There is a lack of info. The Department of Energy has not shared a lot all through this course of, so transferring ahead, we completely want a step-up in info sharing and transparency, particularly as these tasks begin shaping up,” Fakhry. “It is essential for the public to have a say in it, for communities to have a say in it who will dwell by these tasks, but in addition for civil society writ giant, to have a say in how these giant public funds are going to be spent on tasks.”
“One of our high priorities transferring ahead with a number of of our companions is to prod the Department of Energy, prod the hydrogen hub directors into way more info sharing,” Fakhry mentioned.
Another device in the federal authorities’s toolbox to form the development of the clear hydrogen trade in the U.S. is the hydrogen manufacturing tax credit score, 45V, which was included in the Inflation Reduction Act.
How that tax credit score ought to be adjudicated by the Treasury Department is hotly debated. But the implementation of the 45V tax credit score, whether it is adjudicated with strict tips in place, will assist spur corporations working inside the hydrogen hubs to produce low-emissions hydrogen.
If hydrogen is produced without releasing any carbon emissions, the tax credit score is maxed out at $3 per kilogram of hydrogen. The tax credit score, which is out there for 10 years, scales down proportionally based mostly on the amount of emissions launched.
“If the 45V guidelines are very strict and rigorous, then hydrogen manufacturing inside these hubs, each blue and electrolytic, will probably have much better local weather impacts than very weak guidelines,” Fakhry advised CNBC. “Because tasks in the hubs need to faucet into a 45V credit score too. It’s a very profitable credit score.”