House panel considers how hydrogen hubs can help meet climate goals

By Peter Hall

With hydrogen production hubs planned for both ends of the commonwealth, Pennsylvania policymakers will have a major role in ensuring that the projects are successful and contribute to attaining the state’s climate goals, an environmental advocate told lawmakers Monday.

The projects, each a cluster of assets for producing and distributing hydrogen as an alternative fuel, are part of the Biden administration’s stated goal of achieving net-zero carbon emissions by the year 2050.

Last month, President Joe Biden announced $7 billion in funding for seven regional hydrogen hubs in parts of 16 states, including Pennsylvania.

The commonwealth would play a role in incentivizing and regulating the production and use of hydrogen from hubs in Philadelphia and West Virginia.

While some details of the projects are known, critical details that will determine their climate, public health and economic impact must be drafted and finalized in the next 12 to 18 months, Rachel Fakhry of the Natural Resource Defense Council told members of the House Environmental Resources and Energy Committee on Monday.

“Pennsylvania must adopt rigorous climate and public health standards for all hydrogen production,” Fakhry said. “Production is energy intensive. Without strong standards, Pennsylvania’s hydrogen hubs will increase carbon emissions and air pollution.”

The hubs, the Appalachian Regional Clean Hydrogen Hub, or ARCH2, and the Mid-Atlantic Clean Hydrogen Hub, or MACH2, will be centered on the West Virginia border and in the Philadelphia region. MACH2 will receive up to $750 million and the ARCH2 will receive up to $925 million, according to U.S. Sen. Bob Casey.

While scientists have identified hydrogen production as a key element in reaching climate goals, it also has the potential to perpetuate the use of fossil fuels instead of being a tool to combat climate change, House Environmental Resources and Energy Committee Chair Greg Vitali, a Democrat from Delaware County, said.

Hydrogen burns cleanly, producing only water vapor as an emission. But producing it, by splitting apart either molecules of water with electricity or methane using steam, requires energy, which can come from a number of sources including wind, solar, nuclear or fossil fuels.

Vitali is the prime sponsor of a bill that would amend a $50 million tax break for hydrogen producers to require them to meet standards for greenhouse gas emissions including natural gas used as feedstock to produce hydrogen and the carbon dioxide produced as a byproduct. 

Vitali’s bill would also place restrictions on where hydrogen fuel is used to qualify for a tax credit. The amendment would prohibit its use for heating or cooking or as a fuel for small vehicles where electrification is a more climate-friendly option. Instead, qualifying uses would include fuel for aviation or shipping, use in industries and circumstances where electrification is not feasible, and as a means of long-term energy storage.

Democratic Illinois state Sen. David Koehler passed similar legislation to create a tax credit to demonstrate that the state was committed to including hydrogen fuel in its climate efforts.

In addition to tax incentives and restrictions on qualifying uses, the bill includes environmental justice aspects such as public notice and hearing requirements for applicants and incentives to invest in certain qualifying communities. It also requires workforce equity standards and project labor agreements for work to install equipment for hydrogen use.

“It was a struggle to negotiate,” Koehler told the committee on Monday, noting that he led negotiations with the state’s nuclear power generating utility and environmental groups. 

“We were able to really bring the groups together and to say, look, you’re not getting everything you want. But once we got all that in place, it was a good bipartisan bill (that) had Republican support as well as from my side of the aisle,” Koehler said.

Democratic Colorado state Rep. Brianna Titone explained her legislation that incentivizes the use of only the cleanest forms of hydrogen in an effort to attract new technology to the state by focusing on what Titone described as the “three pillars of clean hydrogen.”

The cleanest form, green hydrogen, is produced by using wind, solar or other renewable sources to produce electricity that is used to split water into its constituent elements of oxygen and hydrogen.

Titone’s bill would ensure that hydrogen producers’ demand for clean electricity does not result in electricity produced with fossil fuels being produced to meet the demand from other uses such as transportation and buildings. It also requires that renewable electricity sources are near hydrogen production facilities and that production takes place at the times of day when renewable electricity is at its peak.

Robert Altenburg, senior director for energy and climate for PennFuture, made a comparison to the fracking boom in Pennsylvania and said the state’s approach to fostering and regulating the new industry failed. Under Vitali’s legislation, the state Environmental Quality Board would promulgate regulations on the production and use of hydrogen.

“Despite the promises made by the industry, and huge subsidies provided by the state, both income and jobs in counties with gas generation has lagged the national average,” Altenberg said. “Our communities have been left with pollution instead of prosperity.”

Altenburg said natural gas was pitched as a bridge to a cleaner energy economy in the future, but the bridge was never built and Pennsylvania was left dependent on gas and vulnerable to volatile prices. He added that with the potential for hydrogen to grow as an industry, the state has a new opportunity and that Vitali’s bill is a step in the right direction.

“Pennsylvania can be a leader in the sustainable economy of the future, but to do so, we need to prioritize investments in clean industries, build our workforce and finally start work on that long-neglected bridge,” Altenburg said.