The United States Department of Energy (DOE) said Tuesday it has made a conditional commitment of up to $1.66 billion in loan guarantee for six planned hydrogen production projects by Plug Power Inc.
“Plug has a development pipeline that includes the build-out of clean hydrogen facilities in several potential locations across the United States to supply its national customer base with end-to-end clean hydrogen at scale”, the DOE said in a statement.
“The hydrogen fuel from the project is expected to power fuel cell-electric vehicles used in the material handling, transportation, and industrial sectors, resulting in an estimated 84 percent reduction in greenhouse gas emissions compared to conventional hydrogen production, which derives hydrogen from natural gas and ultimately produces carbon dioxide”, the agency added.
“The benefits of harnessing hydrogen fuel cells in applications such as material handling equipment include enhanced operational efficiency, reduced environmental impact through zero-emission operations, and increased productivity due to faster refueling times compared to conventional batteries.
“Major corporations such as Amazon, Walmart, and Home Depot use Plug’s hydrogen fuel cells across their warehouse and distribution centers”.
Plug operates what is deemed to be the biggest proton exchange membrane electrolyzer system in the U.S. at its Georgia hydrogen plant. Plug has a current production capacity of 25 tons a day for liquid hydrogen according to the company.
“DOE’s support for Plug’s green hydrogen projects represents a major milestone in the U.S.’s commitment to advance the development of large-scale hydrogen production, processing, delivery, and storage”, Plug said in a separate announcement of the conditional commitment. It also underscores the application of green hydrogen to help meet decarbonization goals across multiple sectors of the economy”.
Technical, legal, environmental and financial conditions must be satisfied before the DOE can finalize the funding support, Plug said.
The U.S. has set targets of reaching clean hydrogen production of 10 million tons per annum (MMtpa) by 2030, 20 MMtpa by 2040 and 50 MMtpa by 2050, as specified in the U.S. National Clean hydrogen Strategy Roadmap published November 15, 2021.
Last year the Biden administration announced $7 billion to support the building of clean hydrogen production centers across the country.
The amount will go to seven regional projects that are expected to produce a combined three MMtpa, “reaching nearly a third of the 2030 U.S. production target and lowering emissions from hard-to-decarbonize industrial sectors that represent 30 percent of total US carbon emissions”, the DOE said in a press release October 13.
The projects can result in carbon dioxide emission reductions of 25 million metric tons a year, equivalent to the annual emissions of 5.5 million gasoline-powered motor vehicles, according to the DOE.
Last December 26, 2023, the DOE and the Treasury Department announced proposed rules for a tax incentive promoting clean hydrogen production, with hydrogen derived using fossil fuels still qualifying but for lower credits.
Under the proposed regulations for the Clean Hydrogen Production Credit established by the Inflation Reduction Act, companies that produce cleaner hydrogen and meet prevailing wage and apprenticeship requirements qualify for a credit of $3 per kilogram of hydrogen. Hydrogen whose production process entails higher lifecycle emissions would get less.
The four-tier, 10-year incentive scheme is based on carbon intensity, which must not exceed four kilograms of carbon dioxide equivalent per kilogram of hydrogen produced.
On March 13, 2024, the DOE announced a provisional allotment of $750 million for 52 projects across 24 states to advance electrolysis technologies and grow the domestic supply chain for clean hydrogen production.
“The projects are expected to enable U.S. manufacturing capacity to produce 14 gigawatts of fuel cells per year, enough to power 15 percent of medium- and heavy-duty trucks sold each year, and 10 gigawatts of electrolyzers per year, enough to produce an additional 1.3 million tons of clean hydrogen per year”, the DOE said in a news release at the time.
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