The US Energy Department has mapped out the country's first-ever national strategy for deploying clean hydrogen at scale, an approach the federal agency estimated could cut economywide emissions 10% by 2050.

Published June 5, the DOE's "U.S. National Clean Hydrogen Strategy and Roadmap" outlines three priorities for the federal government: targeting the use of hydrogen in hard-to-decarbonize sectors, reducing production costs and building out regional infrastructure networks for clean hydrogen.

Hydrogen is an industrial gas that can substitute fossil fuels in multiple end uses, including transportation, manufacturing and the power sector. When produced using zero-carbon electricity or carbon capture technology, hydrogen can be combusted with little to no associated greenhouse gas emissions.

Congress in 2021 directed the DOE to develop the strategy through the bipartisan infrastructure law, a spending package that also allocated $9.5 billion to kickstart the nascent clean hydrogen industry. The agency published a draft strategy in September 2022 and is currently reviewing grant applications for up to $8 billion of that funding, which will support at least a half-dozen regional hydrogen hubs. In 2022, the Inflation Reduction Act upped the incentive for clean hydrogen adoption in the US by authorizing a tax credit for producers worth up to $3 per kilogram of output.

The DOE's strategy urges the public and private sectors to target "high-impact uses" of hydrogen with few alternatives for decarbonizing, such as heavy industry, heavy-duty transportation and long-duration energy storage. The plan also identifies long-term opportunities within the sector, including the export of hydrogen — which can be shipped in the form of ammonia — to bolster the energy security of allies.

"This roadmap will align the private and public sectors on a shared path to drive faster toward a cleaner, more secure energy future," White House climate adviser Ali Zaidi said in a June 5 statement. The document is to be updated every three years.

Cross-agency efforts

While the DOE has been leading hydrogen deployment efforts, the agency emphasized collaboration across the Biden administration. "To implement these strategies, federal government agencies will coordinate an efficient 'whole of government' approach to accelerate progress toward a resilient, sustainable, and equitable hydrogen economy," the June 5 document read.

Officials from the DOE and the US Departments of Defense and Homeland Security underscored that commitment at the unveiling of a hydrogen-powered emergency relief vehicle, parked outside DOE headquarters in Washington, DC, on June 5.

The DOE and US Army Corps of Engineers contracted manufacturer Cummins Inc. to develop the power-generating prototype, which can provide water and up to 72 hours of electricity to an emergency shelter. The unit runs on 18 tanks of hydrogen and would replace diesel-powered generators deployed to disaster-stricken sites.

"Today, fueling stations are few and far between. But thinking about the future, we're going to have to have hedges," Dimitri Kusnezov, Homeland Security's undersecretary for science and technology, said on the sidelines of the event.

Agencies cannot afford to wait for a fully developed hydrogen infrastructure to start innovating, Kusnezov said, adding, "I think a lot of these things have to be done in parallel."

S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.