RMP has been advocating for the Hydrogen Economy and creating one of the most comprehensive GIS databases of hydrogen infrastructure in North America since 2008. What RMP never expected would be all the “anti” hydrogen takes, slander, and libel against hydrogen. Somehow, the narrative turned to batteries -vs- hydrogen which RMP long ago declared as the “false dichotomy” because it’s just not true. We don’t have to choose between batteries and hydrogen, we will need both technologies. RMP supports environmentally responsible battery mining and mineral processing done right here in North America. In fact, batteries are ironically a very important part of the hydrogen economy.
The hydrogen economy is an enormously diverse and all encompassing concept. Hydrogen is a common denominator in energy and waste management. It can be made from water, trash, human waste, animal farm waste, food waste, nuclear, natural gas, coal, hydro, sun, wind and many other ways. Hydrogen for vehicles is just part of the hydrogen economy and all hydrogen FCEVs require batteries. The concept is to have a sustainable and prosperous economy with hydrogen as a common denominator.
As the world seeks to transition to a low-carbon future, hydrogen is seen as a critical component due to its versatility and potential to decarbonize sectors that are hard to electrify, such as heavy industry, transportation, and energy storage. Recent legislative actions, particularly the Inflation Reduction Act (IRA) of 2022, have accelerated investments in the hydrogen sector, leading to substantial growth in both electrolyzer manufacturing and hydrogen production.
U.S. Investments and the Inflation Reduction Act (IRA)
The Inflation Reduction Act (IRA) represents a landmark in U.S. policy, aiming to reduce greenhouse gas emissions while boosting economic growth. The IRA allocates substantial financial resources towards the development of a clean hydrogen economy. Key provisions include tax credits, subsidies, and direct investments that aim to make clean hydrogen more economically competitive with fossil fuels.
The most significant component of the IRA for the hydrogen sector is the introduction of the 45V tax credit, which provides up to $3 per kilogram of clean hydrogen produced. The credit is tiered, with the amount depending on the carbon intensity of the hydrogen production process, incentivizing the production of low-carbon hydrogen, particularly “green hydrogen” generated through electrolysis powered by renewable energy.
The IRA also includes provisions for supporting hydrogen infrastructure, such as pipelines, storage facilities, and refueling stations, essential for the widespread adoption of hydrogen as a fuel. Additionally, the act encourages research and development (R&D) in advanced hydrogen technologies, including innovations in electrolyzer efficiency, hydrogen storage solutions, and end-use applications.
Growth in Electrolyzer Manufacturing
Electrolyzers are critical to the hydrogen economy, as they are the primary technology used to produce green hydrogen. The IRA’s incentives have sparked a surge in investments in electrolyzer manufacturing in the U.S. Several domestic and international companies have announced plans to build new electrolyzer factories in the United States, aiming to meet the anticipated increase in demand for green hydrogen.
For instance, companies like Plug Power, Nel ASA, and Cummins have committed to expanding their manufacturing capacities in the U.S. Plug Power, a leader in hydrogen solutions, has begun constructing a Gigafactory in Rochester, New York, with plans to produce up to 1.5 gigawatts (GW) of electrolyzer capacity annually. Similarly, Nel ASA, a Norwegian electrolyzer manufacturer, is planning a large-scale facility right here in Michigan, contributing to a growing domestic supply chain.
These investments are expected to make the U.S. a global leader in electrolyzer production, reducing reliance on foreign suppliers and fostering domestic job creation. The increased availability of electrolyzers is crucial for scaling up green hydrogen production, which in turn supports the broader hydrogen economy.
Hydrogen Production Growth
The combination of IRA incentives and the expansion of electrolyzer manufacturing is driving rapid growth in hydrogen production across the United States. As electrolyzer costs decrease and renewable energy prices continue to fall, green hydrogen production becomes increasingly viable. The IRA’s 45V tax credit significantly improves the economics of hydrogen production, making it competitive with traditional fossil fuel-based hydrogen, known as “gray hydrogen.”
Several large-scale hydrogen production projects have been announced in response to the IRA. These include projects such as the Western Green Hydrogen Initiative, which aims to produce green hydrogen at scale in states like California, Arizona, and Nevada, leveraging abundant solar and wind resources. Additionally, oil and gas companies are beginning to invest in blue hydrogen production, where natural gas is converted into hydrogen with carbon capture and storage (CCS) technologies, though green hydrogen remains the ultimate goal for achieving net-zero emissions.
The Department of Energy (DOE) has also launched initiatives to create regional hydrogen hubs, known as the H2Hubs, which will focus on producing, storing, and using hydrogen in key industrial regions. These hubs are expected to catalyze local hydrogen economies, creating synergies between hydrogen production and end-use sectors, such as transportation and heavy industry.
Conclusion
The hydrogen economy in the United States is entering a transformative phase, driven by significant investments spurred by the Inflation Reduction Act. The act’s provisions have catalyzed growth in electrolyzer manufacturing, making the U.S. a key player in the global hydrogen market. This growth, in turn, is driving an increase in hydrogen production, positioning hydrogen as a cornerstone of the U.S. strategy to achieve a low-carbon, sustainable energy future.
As the U.S. continues to develop its hydrogen economy, ongoing policy support, technological innovation, and investment in infrastructure will be critical to realizing the full potential of hydrogen as a clean energy solution. The next decade will be crucial in determining how effectively the U.S. can scale up its hydrogen production and integrate it into its broader energy system, paving the way for a more sustainable and resilient energy future.
