DOE Awards ARCH2 Hydrogen Hub $30 Million to Kickstart Blue and Green Hydrogen Projects

On July 31, 2024, the U.S. Department of Energy (DOE) awarded the Appalachian Regional Clean Hydrogen Hub (ARCH2) its first round of funding, marking the official launch from a funding perspective to one of the most significant hydrogen initiatives in the United States. See ARCH2 Phase 1 Announcement. ARCH2 received an initial $30 million award as part of its larger $925 million award in potential funding, which will be disbursed in four phases over the next eight to twelve years. Id.; see also Funding Notice. This funding, provided under the Infrastructure Investment and Jobs Act (IIJA), combined with certain nonfederal cost share requirements, is aimed at developing regional hydrogen hubs to facilitate the production, transportation, and consumption of clean hydrogen. 42 U.S.C. § 16161a. The IIJA mandates the creation of at least four regional hubs while the DOE has plans to initially fund seven such hubs. Id.; see also Hub Announcements. The full funding or award period is expected to include two to four years of operations beyond the six to eight years of planning, development, and construction. See Funding Notice.

ARCH2 is centered in West Virginia, Ohio, and Pennsylvania, a region historically known for its energy production from sources such as coal and natural gas. See ARCH2 Project Summaries. Accordingly, the hub will primarily focus on producing blue hydrogen, utilizing the area’s abundant natural gas resources, paired with carbon capture and storage (CCUS) and carbon utilization technologies. Id. However, the hub also includes green hydrogen projects focusing on production from renewable sources such as biomass and food waste. Id. The initiative to develop both blue and green hydrogen aligns with Appalachia’s natural strength in more traditional energy production while supporting the development of new energy systems. The hub is also expected to reduce CO2 emissions by nine million metric tons per year, and it will include projects seeking to develop hydrogen infrastructure such as pipelines, refueling stations, and sustainable aviation fuel to advance this goal. See ARCH2 Phase 1 Announcement; ARCH2 Project Summaries.

This first phase of funding and development is expected to last up to 36 months and involves initial planning, financial and technical analysis, and engagement with local stakeholders. Id.; see also Funding Notice. Another go/no-go decision point awaits ARCH2 before funding of the second phase, which focuses on finalization of engineering designs and business development, operational agreements (e.g., site access, labor, permitting, offtake), and additional community engagement. See Funding Notice. The third phase is the implementation step and will involve installation, integration, and construction activities. Id. The final phase will focus on operations and data collection to analyze the viability of operations, performance, and financials. Id.

The DOE’s commitment to ARCH2 represents a broader national effort to develop hydrogen hubs across the United States, with a focus on utilizing regional strengths. For example, the Gulf Coast Hydrogen Hub (HyVelocity H2Hub) plans to leverage that region’s traditional oil and natural gas resources in addition to its abundant solar and wind resources to produce blue and green hydrogen. See Hub Announcement. Similarly, the Mid-Atlantic Hydrogen Hub (MACH2) will produce pink hydrogen from nuclear energy and green hydrogen from renewable sources. Id. Other winners of early award funding from the DOE include the Pacific Northwest Hydrogen Hub (PNWH2) with $27.5 million and the California Hydrogen Hub (ARCHES) with $30 million. See Other Awards.

With the initial funding now in place, ARCH2 is taking the next steps to become a key player in the U.S. hydrogen economy, advancing both regional decarbonization efforts and the nation’s overall energy security.

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