What Happened to Pennsylvania’s Hydrogen Hubs?

by Rebecca McCarthy (Inside Climate News) Backed by the federal government and bipartisan leadership, Pennsylvania’s hydrogen projects were supposed to create jobs and slash emissions. Now, they’re in limbo.

Three years ago, hydrogen seemed poised for a long-awaited breakthrough. The Biden administration announced $7 billion in federal funding for seven hubs to produce the fuel across the country, and Pennsylvania was set to be a major player in the emerging industry.

During a 2023 speech at Philadelphia’s Tioga Terminal, President Joe Biden assured the crowd that Pennsylvania’s two hubs—the Mid Atlantic Regional Hydrogen Hub and the Appalachian Hydrogen Hub, commonly known as MACH2 and ARCH2—would be transformational. The hubs would connect a vast network of hydrogen producers, users, and researchers across Pennsylvania, Delaware, New Jersey, West Virginia and Ohio. They were backed by a bipartisan coalition and designed to bring economic opportunity to red states, with support in Pennsylvania from both Gov. Josh Shapiro and Sen. Dave McCormick. In 2023, Shapiro said the hubs would “ensure Pennsylvania continues to be an energy leader for decades to come.”

ARCH2 has gone totally dark, with former partners denying involvement or stonewalling media requests, and MACH2 has entered a holding pattern. Experts with knowledge of the hubs say that the federal government has been playing a game of “will they, won’t they”—changing their minds from week to week.

In other words, no one wants to move forward with investment until they have a sense of whether the federal government will continue to fund the hub. As of late September, MACH2 was still circulating a request from January for potential partners to join the hub. The Department of Energy did not respond to repeated requests for comment.

Even before Donald Trump took office, the hubs were facing an uphill battle, held up by a long lobbying fight over who would qualify for the 45V tax credits, which offered producers up to $3 per kilogram of hydrogen produced.

To complicate matters, green hydrogen, which involves using clean energy to produce a different kind of clean energy, is notoriously difficult to produce cost effectively. The fuel is created through a process called electrolysis—essentially, running an electrical current through water, which separates the hydrogen and the oxygen. If you hook a solar panel up to an electrolyzer, about 30 percent of the energy from that panel will be lost just in the process of isolating the hydrogen. By the time you compress it into a fuel cell or liquefy it for transport, then convert it back into electricity, about 70 percent of the energy generated by that original solar panel is gone. And even once you’ve managed to produce it, hydrogen is exceedingly leaky—the smallest element in the periodic table, able to escape even from sealed steel vats.

This is part of why the hubs drew so much pushback from environmental groups, who decried the fuel as a false solution when Biden’s plans were first announced.

Although it was initially reported that MACH2 was on the chopping block, Department of Energy Secretary Chris Wright announced that the hydrogen hubs would retain their funding in April—but to what end is entirely unclear.

Producers now have until December 31, 2027 to begin work before the (45V) tax credits expire, rather than the original deadline of 2032. That deadline seems all but impossible to meet, especially given the fact that the DOE does not plan to spend any more on the hubs this year, according to their July apportionment plan.

The 2027 President’s Budget Request released in April currently calls for “permanently cancelling” unobligated funding for clean hydrogen programs and repurposing “Green New Scam funding” in favor of baseload power upgrades and spending $1.2 billion on the construction of seven AI supercomputers at Argonne and Oak Ridge National Laboratories.

“The hydrogen story is really an ammonia story, in the U.S. at least,” said Juhn. Without subsidies to offset the increased cost of buying clean fertilizer for farmers, it’s difficult to build up a domestic market—meaning any green ammonia that is produced in the United States will ultimately be shipped overseas.

For the green steel industry, it’s a major setback, said Hilary Lewis, steel director at Industrious Labs. “I think it’s kind of surprising to folks that we still make steel the way that you imagine in your head—big, hot furnaces, with hot metal flying everywhere, dirty coal going in, and lots of pollution,” said Lewis. “That’s still how we do it. It’s how we’ve been doing it for centuries.”

In the meantime, Torres said, many former hydrogen hub partners are pivoting to the energy cause du jour—data centers. He pointed to the Adams Fork Energy Project in West Virginia, which was initially conceived as a coal-to-gas facility. In 2023 it joined the ARCH2 hub as a partner with plans to build a massive ammonia hub, but was later dropped from the project. This year, the same company pivoted to constructing gas plants to power a data center. At least four other former ARCH2 partners—Hog Lick Aggregates, EQT, Fidelis New Energy and CNX Resources—have joined them. READ MORE