The US has published a National Clean Hydrogen Strategy and Roadmap that lays out a government-wide approach to developing the nation’s low-carbon hydrogen sector, building on various initiatives already underway.

Developing the report was a legal requirement of the Bipartisan Infrastructure Act. It will be updated at least every three years as the sector develops. It is designed to co-ordinate action between state and federal government agencies including the Department of Agriculture, Department of Commerce, Department of Defense, Department of Energy (DoE), Department of the Interior, Department of Labor, State Department, Department of Transportation, and the Department of the  Treasury.

The strategy lays out a plan to develop 10mn t/yr of low-carbon hydrogen supply by 2030, 20mn t/yr by 2040 and 50mn t/yr by 2050.

10mn t/yr – US 2030 hydrogen production target

The 10mn t/yr target matches that of the EU, but the US strategy goes into greater detail than the EU’s on all aspects of the hydrogen economy, with a notable focus on ensuring there is enough demand pull for the supply goals it lays out.

“Although clearly ambitious, these goals are achievable and are based on demand scenarios assuming cost-competitiveness for hydrogen use in specific sectors,” says the US strategy.

“These values are based not only on the opportunity for clean hydrogen production in the US, but also on demand for clean hydrogen use across sectors, informed by achieving market competitiveness in specific applications.”

Production

The strategy builds on the US Hydrogen Shot goal, which aims to achieve a $1/kg low-carbon hydrogen production cost by 2030, introducing an interim target of $2/kg by 2026. 

Hydrogen from proton-exchange-membrane electrolysis requires an 80pc reduction in costs to achieve this. Most of this will come from reducing the capital and maintenance costs of electrolysers. Together, these form more than $2/kg of the current $5/kg cost of producing green hydrogen (figures not including tax credits). The roadmap aims to reduce this to less than $0.5/kg by 2026 and less than $0.2/kg by 2031.

“These cost reductions will require high-volume manufacturing, innovations in electrolyser stacks and balance of plant components, and electrolyser integration in next-generation systems,” says the report, adding that many of these goals will be achieved by natural efficiency gains and economies of scale as electrolyser deployment is incentivised by the $3/kg production tax credit (PTC) laid out in the Inflation Reduction Act (IRA). In addition to the PTC, the administration has also launched a $1bn electrolysis support scheme to support electroylser R&D.

The extensions in the IRA of the PTC and investment tax credit for renewables and nuclear will help drive down clean electricity costs, which account for the other $3/kg of the current $5/kg cost of producing green hydrogen. Modelling in the report shows achieving a $2/kg hydrogen price would require an electricity price of $30/MWh, and achieving $1/kg would require $20/MWh. Current prices are c.$50/MWh.

Blue hydrogen costs are already lower, and these supply projects are likely to get underway faster. Such projects already account for just under 5pc of US hydrogen production and can combine the 45Q tax credit for CCS with PTCs for hydrogen production.

“A mix of hydrogen production from water electrolysis, hydrogen production from fossil fuels with CCS, and hydrogen production from biomass and waste feedstocks will likely be used in the US through at least 2050,” says the roadmap.

Midstream

Operational data from California show the delivery cost of hydrogen to fuelling stations, including compressing and dispensing, can be more than $13/kg. The strategy therefore lays out a number of specific goals for the midstream with the aim of reducing the costs of transport and storage.

These include improving the performance of compressors and liquefaction cryopumps, improving the accuracy of flow meters, developing liquid hydrogen trucking and reducing the cost of compressed hydrogen trucking—especially composite-wrapping, which is an expensive containment method used on many such trucks.

Also in the midstream, the Biden administration is providing $8bn for the development of hydrogen hubs, which it sees as vital to creating the first building blocks of a national hydrogen infrastructure.

Downstream

The strategy lays out demand uptake in various waves, based on how much it will cost to displace traditional fuel use in any particular demand sector. In the first wave are forklifts, transit buses, heavy-duty trucking, refining and ammonia.

In forklifts, hydrogen is already cheaper. In buses and trucking hydrogen, costs would need to fall to $4/kg to be competitive. Parity in the refining and ammonia sectors could take longer and is highly dependent on natural gas prices but would be reached at hydrogen costs of around $2/kg.

“These goals are achievable” US DoE

The second wave sees small marine vessels, power generation, steel production and aircraft powered using sustainable aviation fuel (SAF). Most of these sectors would require hydrogen costs of below $2/kg to be competitive without subsidies. The US has already put in place a ‘Grand Challenge’ scheme to produce 3bn gal/yr of SAF by 2030, and two new tax credits created by the IRA will support the creation of the industry.

The third wave includes cement production, industrial heat, stationary fuel cells, methanol production, container ships and power-to-liquid fuels, sectors that will require hydrogen to approach costs of $1/kg to be competitive with current fuels without subsidy.

Unlike the EU strategy, the US does not mandate particular levels of hydrogen use in the transport and industry sectors, instead focusing on providing high-level investment support and financing R&D through initiatives such as the 21st Century Truck Partnership (21CTP) and the DoE’s Advanced Research Projects Agency–Energy. The IRA also appropriated a $2bn grant and $3bn loan programme for auto manufacturers to make low-carbon vehicles, including FCEVs.

Costs

Public and private sector investments of $85–215bn will be needed by 2030 to achieve the production and use goals outlined in the report. These investment will be catalysed by continuing cost reductions and de-risking as a result of clear government strategy, according to the report.

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Author: Tom Young