On March 24, 2022, New York State Governor Kathy Hochul announced that New York, New Jersey, Connecticut and Massachusetts plan to submit a joint proposal to the United States Department of Energy (DOE) to secure a portion of the $8 billion set aside for regional hydrogen hubs when applications open in May. This alignment represents a critical step in advancing New York’s Climate Leadership and Community Protection Act (CLCPA) goal to reduce greenhouse gas emissions 85 percent by 2050.
The Infrastructure Investment and Jobs Act has established billion dollar budgets for various sectors of infrastructure in the U.S., including providing $8 billion for hydrogen hubs, $1 billion for hydrogen electrolysis research, and $500 million for a clean hydrogen manufacturing, recycling, research and development and demonstration program.
The DOE will choose a minimum of four locations in the U.S. to locate regional hydrogen hubs. Hydrogen hubs are areas where producers and users of hydrogen across industrial, transport and energy markets are co-located. Hydrogen hubs generally minimize infrastructure costs and support economies of scale in producing and delivering hydrogen to customers. The law pushes for diverse energy sources for hydrogen products in these hubs, requiring that one hub produce hydrogen from fossil fuel, one from renewables, and one from nuclear energy.
Consortium partners have committed to collaborate with New York State Energy Research and Development Authority (NYSERDA), New York Power Authority (NYPA) and Empire State Development (ESD) on proposal development to advance hydrogen projects. Likewise, partnering states will coordinate with their respective state entities to help align the consortium’s efforts. The consortium state’s greenhouse gas reduction goals are similar to New York’s goal of 85% reduction by 2050. New Jersey and Connecticut share a goal to reduce greenhouse gas emissions 80% by 2050 and Massachusetts’ goal is to be carbon neutral by 2050. The four state agreement also includes 40 energy, education, government and other groups.
The execution of the agreement between the parties reflects the development of:
- A defined shared vision and plan for the regional hydrogen hub that can advance safe green hydrogen energy innovation and investment;
- A hub proposal that makes climate and environmental justice central to its strategy;
- All necessary research and analysis to support the hub proposal and align on approach to quantify greenhouse gas emission reductions as a result of deploying this technology;
- A framework to ensure the ecosystem for innovation, production, infrastructure and related workforce development is shared across all partner states; and
- Environmentally responsible opportunities to develop hydrogen, in accordance with participating state policies.
Additional public and private partners, including more states in the region, are still actively being sought to join the proposal.
Phillips Lytle’s attorneys have been carefully monitoring developments and working with clients at the forefront of hydrogen and throughout the renewable energy space. We are available to assist clients in strategizing and capitalizing on opportunities throughout New York and the region.