A Wilmington-based company plans to produce hydrogen at a new $226 million factory in Dover, but it isn’t counting on federal subsidies or orders from any of the nine other members of the Mid-Atlantic Clean Hydrogen Hub (MACH2).
Andrew Cottone chief executive of the clean-hydrogen and heavy-water manufacturer Aternium, on Tuesday announced that it has selected the Garrison Oak Technical Park inDover for the nation’s first production center of the fuels.
The company is expected to become the first member of MACH2 to become operational when it begins producing in mid to late 2028.
Across the U.S., MACH2 is one of five surviving regional “hydrogen hubs” seven of which were first selected by the Biden administration in 2023, and offered up to a total of $7 billion as seed money for producing, distributing and consuming hydrogen as an alternative to fossil fuels for hard-to-decarbonize industries such as long-haul trucking.
The mid-Atlantic hub, whose network would consist of all of Delaware, southern New Jersey, and southeastern Pennsylvania, was first promised as much as $750 million in federal funds to kickstart the hydrogen industry, but it has received just a fraction of that, and future federal support remains uncertain.
“I share that uncertainty, but Aternium is not depending on MACH2 to be successful," Cottone told DPM. “We’re dependent on capitalism and free-market principles.”
Cottone followed comments by Manny Citron, chief operating officer of MACH2, who said the hub of “about 10” companies is behind schedule and is still unsure whether, or at what level, it will continue to attract the promised federal money.
“Things are moving cautiously at this time; there is still uncertainty over whether the Department of Energy will move forward with the program or not,” Citron said. “We are looking forward to hopefully a positive resolution that will allow us to move forward with the individual projects that have been proposed for the hub.”
But in a statement on Tuesday, Citron welcomed Aternium’s announcement as a boost for the program.
“MACH2 is thrilled at today's announcement that Aternium has selected Dover as the site of their flagship hydrogen/heavy water production facility,” Citron said in a statement. “This announcement marks a major step forward for hydrogen production projects that are part of the Mid-Atlantic Clean Hydrogen Hub.”
A statement from Aternium early Tuesday did not name the hub, but predicted that the Dover plant will in future be part of a regional network of hydrogen companies.
“The Dover facility is expected to be the first in a planned network of production sites across the mid-Atlantic region, enabling a reliable, resilient and scalable supply platform for customers as demand grows,” it said.
Even if the federal Department of Energy continues its support of the national hydrogen program, prospective subsidies are far short of the cost of setting up hydrogen businesses. At Aternium, the federal government has promised just $23.3 million toward the anticipated $226 million cost of the new Dover plant, and the company has received only $510,000 so far, Cottone said.
The remainder of the cost for setting up the Dover plant will be met with bonds, loans and equity, he said.
Cottone said Aternium’s business plan isn’t based on the expectation of orders from consumers or distributors of hydrogen in MACH2, or on federal subsidies.
“Our success is based on our ability to have strategic partnerships. The hydrogen economy is coming and we want to emulate what the American Gulf Coast is doing. We don’t need those subsidies like a lot of other companies do because we have a viable business,” he said.
The company plans to produce “clean hydrogen” using emissions-free sources of electricity from wind, solar and nuclear power.
In Dover, the company expects to create about 50 permanent, direct jobs, paying in the “low six figures”, Cottone said. He aims to close on the real estate in the fourth quarter of 2026, complete the engineering by February next year; make a final investment decision by March 2027, and break ground later that year. Operations would begin by mid to late 2028.
Cottone said the company chose Dover because it showed community support for the project, had the needed water and electricity infrastructure, and the required area of land, and had the proximity to major customers,
“Dover was the first municipality to step up and say ‘We’re going to update our zoning’. We don’t need money, we need partnership,” Cottone said.
In mid-July, Dover City Council approved an ordinance that allows the permitted use of clean-hydrogen facilities in specific industrial zones within city limits,
Although the company doesn’t expect to start producing electrolytic hydrogen and heavy water at Dover for about two years, its investment decision was hailed by local business groups.
The investment is “significant for the Dover area, that large of a project,” said Linda Parkowski, executive director of the Kent Economic Partnership. “There will be spinoff jobs that come with this in addition to the main jobs. This is a big deal for the Dover area.”
Dina Vendetti, president of the Central Delaware Chamber of Commerce, also welcomed the investment on the heels of Dover City Council’s vote to allow clean hydrogen facilities in specific industrial zones in Dover’s city limits- mostly manufacturing or technology zones.
“We are certainly promoting this and certainly feeling good about it,” Vendetti said. “What they were really doing was modernizing the code. The production of clean hydrogen had been prohibited. The manufacturing of clean hydrogen will be allowed in the manufacturing zones of the City of Dover.”
The project was also welcomed by Gov. Matt Meyer, who said it continues a tradition of innovation by Delaware companies.
“This investment puts Delaware at the forefront of the next generation of energy and advanced manufacturing,” Meyer said in a statement.
