Hydrogen – A Versatile Tool for Our Energy Future
Hydrogen is the most abundant element in the universe; it is also the simplest and the lightest. Although hydrogen constitutes nearly 75% of all the universe’s matter, only a small fraction of the hydrogen accessible on Earth exists in a pure state (not bonded to other elements). Producing hydrogen typically involves extracting it from other materials—such as fossil fuels, biomass, or water—using an external source of energy. In addition, geologic (or natural) hydrogen—which forms underground through geologic processes—is receiving growing interest, with its potential for extraction and use being examined by industry and governments all over the world.
Hydrogen is an important part of a strategy to make energy more affordable, abundant, secure, and flexible for American businesses and families. Hydrogen is currently used in several essential industrial processes—including a more than 100-year-long history of use in petroleum refining—and it can play a growing role in all kinds of domestic energy production, including fossil, nuclear, and renewables. Hydrogen’s diverse uses—which include chemical processes, high-heat applications, and for producing electricity (via fuel cells or combustion turbines)—will enable it to provide value in multiple sectors of the economy, from industrial processes to heavy transportation, to long-duration energy storage.
The key advantages of hydrogen are:
- Versatility of sources -Unlike traditional energy resources, which are typically geographically constrained, hydrogen can be produced virtually anywhere, using all domestic energy resources.
- Versatility of uses - Hydrogen has been described as the “Swiss army knife” of energy because it can be used across many sectors of the economy, including critical applications that are essential to prosperity and a modern standard of living, such as petroleum refining, steelmaking, and fertilizer production. In addition to its important industrial uses, hydrogen can also be used in fuel cells to produce electricity at high efficiencies across a wide range of stationary-power applications (including data centers, energy storage, and backup power) and transportation applications (such as buses and heavy-duty trucks).
- Local pollution reduction - Hydrogen can be used in many applications with no local air pollution or emissions. For example, when hydrogen is converted to electricity in a fuel cell, only water vapor is emitted.
The government and the private sector are committing resources and attention to developing the hydrogen economy for the benefit of all Americans. Funding from the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) build on long-standing research, development, demonstration, and deployment efforts funded through annual appropriations.
Historic Federal Funding—The Infrastructure Investment and Jobs Act
Provisions in the IIJA include $9.5 billion for hydrogen—with $8 billion for regional hydrogen hubs (H2Hubs), $1 billion for electrolysis research, development and demonstration (RD&D), and $500 million for hydrogen technology manufacturing and recycling research and development (R&D). These funds work in concert with and supplement long-standing RD&D programs across the federal government, funded through annual appropriations.
Industry-Boosting Incentives—The Inflation Reduction Act
The IRA offers financial incentives to spur deployment and use of hydrogen technologies, including a hydrogen production tax credit that provides a credit of up to $3 per kilogram of hydrogen (this incentive varies based on the carbon intensity of the hydrogen production pathway) and an investment tax credit of up to 30% for new hydrogen-production facilities.
Coordinated Federal Action—The Hydrogen Interagency Task Force
The Hydrogen Interagency Task Force is a collaboration among U.S. federal agencies to further advance a whole-of-government approach to executing the national hydrogen strategy. Member agencies are working to coordinate activities across the full spectrum of research, development, demonstration, and deployment (RDD&D) and many related enabling factors. This includes funding in RDD&D across multiple federal agencies, through annual appropriations—including more than $430 million in DOE funding (in Fiscal Year 2023).
The U.S. Department of Energy’s Hydrogen Initiatives and Programs
Flagship Initiatives
The H2Hubs Program, funded by the IIJA, is establishing regional hydrogen hubs across America to accelerate commercial hydrogen deployment. These hubs will create a national network of hydrogen producers, consumers, and infrastructure, supporting hydrogen's production, storage, delivery, and end-use for dispatchable power, energy storage, heavy industry, and transportation. To ensure long-term viability, the DOE is also funding a "demand-side initiative" to unlock the H2Hubs' market potential. The Hydrogen Energy ShotTM, the first DOE Energy EarthshotsTM Initiative, aims to reduce hydrogen costs to $1 per 1 kilogram within a decade, making it affordable for new markets like iron and steel production, ammonia, heavy-duty trucking, and energy storage. The H2@Scale initiative provides a vision for hydrogen to connect various energy sectors, outlining how innovations in hydrogen production, storage, transport, and utilization can drive revenue, reduce costs, and improve efficiency.
The DOE Hydrogen Program: Coordinated Research, Development, Demonstration, and Deployment of Hydrogen Technologies
DOE is pursuing a broad portfolio of hydrogen production pathways, including splitting water, tapping into fossil resources with carbon capture; and extracting hydrogen from biomass and waste-stream resources.
To support a wide range of applications, DOE is advancing technologies to enable delivery of hydrogen as a gas in pipelines and high-pressure tube trailers, as a liquid via tanker trucks, and using chemical hydrogen carriers.
DOE is advancing technologies and systems for storing hydrogen using physical processes—as a compressed gas or cryogenic liquid and using material-based processes that incorporate hydrogen in chemical compounds.
DOE conducts a broad portfolio of RD&D to improve conversion of hydrogen into electricity and heat—both through combustion using turbines or reciprocating engines, and through an electrochemical process using fuel cells.
To enable use of hydrogen across multiple sectors, DOE supports the development and demonstration of technologies for using hydrogen in transportation, chemical and industrial processes, stationary power generation applications, and integrated hybrid energy systems.
By developing processes and technologies specifically tailored to high-volume manufacturing, DOE is helping to achieve economies-of-scale in manufacturing. These efforts can also lead to additional technology and systems-integration improvements, resulting in even greater cost reductions.
DOE supports the development and revision of necessary codes and standards to enable safe and economical deployment of hydrogen technologies. These efforts include research to improve understanding of the physical and chemical properties of hydrogen, close coordination and collaboration with code and standard development organizations, and global collaboration to harmonize international standards.
DOE also supports large-scale demonstrations and deployments. Including cost-shared funding in the H2Hubs and loan guarantees for commercial hydrogen installations.
Highlights
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In collaboration with other federal agencies, DOE is developing plain-language information resources written for the general public. These concise and handy resources aim to expand understanding of hydrogen and its potential role in an affordable and secure energy future.
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This groundbreaking strategy document explores opportunities for hydrogen to contribute to national goals across multiple sectors of the economy and provides a snapshot of hydrogen production, transport, storage, and end use today with a strategic framework for achieving large-scale production and use of hydrogen.
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This report aims to establish a common fact base and ongoing dialogue with the private sector around the path to commercial liftoff for hydrogen—and to catalyze more rapid and coordinated action across the full hydrogen value chain. It is part of a series of reports that represent a department-wide initiative to strengthen engagement between the public and private sectors to accelerate key energy technologies. The reports provide the private sector and other industry partners a valuable, engagement-driven resource on how and when certain technologies—beginning with hydrogen, advanced nuclear, and long duration energy storage—can reach full scale deployment.
