The planned Mid-Atlantic hydrogen hub got a sliver of federal funding in the dying moments of the Biden administration in what supporters see as the next step toward it becoming a reality but which critics say is just a token gesture for an expensive technology that won’t help curb climate change.
The absence of federal funding for the Mid-Atlantic Clean Hydrogen Hub (MACH2) until the afternoon of Jan.17 – effectively the last possible moment for former President Joe Biden’s Department of Energy to act – fueled speculation that the hub would fade away without essential federal help. Instead, it received just $18.8 million out of up to $750 million promised when the program was announced in October 2023.
Now that the proposed local network of hydrogen producers, consumers and distributors has the money for its planning and community-input phase over the next 12-15 months, hub leaders say they will move ahead, but the money hasn’t deterred opponents.
“It doesn’t change our critique of MACH2 in any way,” said Tracy Carluccio, deputy director of the environmental group Delaware Riverkeeper Network which has opposed the hub since the beginning. “MACH2 funding is an enormous mistake and a waste of taxpayer money.”
The hub, in Delaware, southern New Jersey and southeastern Pennsylvania, would generate mostly so-called green hydrogen by using electricity from renewable sources such as wind and solar to separate the gas from water using a technique called electrolysis. A small share of the process would use power from nuclear energy at a plant in southern New Jersey to produce “pink hydrogen”. The remainder would come from biomethane emissions from a Philadelphia wastewater treatment plant. Those emissions, currently flared, would be used to create “orange hydrogen”, while the resulting carbon is buried using carbon-capture technology.
The hydrogen would be used for hard-to-decarbonize industries such as power generation and long-distance trucking. Such uses would reduce carbon emissions by 1 million metric tons a year, the equivalent of that produced by 220,000 gasoline-powered cars, according to the U.S. Department of Energy’s Office of Clean Energy Demonstrations, which announced the funding.
The plan sets MACH2 apart from some other hubs which plan to produce so-called blue hydrogen with electricity from natural gas-fired power stations. Burning a fossil fuel would increase greenhouse gas emissions, and so is opposed by environmental groups.
Critics have also questioned whether MACH2 hydrogen would be truly “green”, but the hub’s co-chair, Collin O’Mara, insists it will be the only one to produce “green hydrogen”, and that the new federal funding allows MACH2 to stay on course.
He said the last-minute announcement of the funding was because the project’s 12 partners wanted to evaluate how they would be affected by new federal rules, published on Jan. 3, that determine whether hydrogen producers and consumers are eligible for tax breaks.
“A lot of our partners wanted to see the 45V tax credit rules to see whether various projects would qualify, and we were building the cost-share accordingly. We wanted to be sure it was viable before making all the commitments, so we finalized the agreement shortly thereafter,” O’Mara said in an interview.
Asked whether MACH2 participants got what they wanted in the new rules, O’Mara said it was enough to allow the project to go forward. “it’s complicated but we can make it work. It provides sufficient support to make the projects viable,” he said.
Despite the Trump administration’s emphasis on boosting production of fossil fuels, and its sudden halt in issuing new permits for offshore wind power, there’s no sign that it will turn off the funding spigot for hydrogen, said O’Mara, a former secretary of Delaware’s Department of Natural Resources and Environmental Control, and an unsuccessful candidate for governor in last year’s election.
“There’s strong bipartisan support,” he said. “Many of the hubs are in pretty conservative parts of the country. It aligns with the president’s priorities of making more things in America; producing more energy in America. We’ve been pleased with the conversations we’ve had so far with DOE leadership about how they see hydrogen as part of the American energy future.”
O’Mara dismissed a suggestion that the Trump administration has no interest in renewable energy, and said the DOE has recently expressed support for geothermal, hydropower, and carbon-capture technologies, such as those proposed for hydrogen hubs that use natural gas to generate electricity. “We’re confident that this is seen as an industrial clean fuel,” he said.
“There’s strong bipartisan support. Many of the hubs are in pretty conservative parts of the country. It aligns with the president’s priorities of making more things in America; producing more energy in America."Collin O'Mara - MACH2 co-chair
The Mid-Atlantic hub currently has 12 participants that would make or use hydrogen, or in the case of participating colleges such as the University of Delaware, train students in the skills needed to work in the hydrogen industry. Six of the 12 are based in Delaware.
They include Dover-based Chesapeake Utilities which would use solar power to produce hydrogen, and then build infrastructure for a hydrogen fueling station at Georgetown. PBF, owner of Delaware City Refinery, plans to use renewables to make hydrogen in electrolyzers the size of truck-trailers at its plant.
At Dupont’s Experimental Station, hydrogen from the hub would be blended with natural gas to fire its boilers, said spokesman Daniel Turner. “The best-use case for hydrogen as a fuel source is for large and steady industrial scale power needs, with access to existing pipelines and infrastructure – this aligns well with the Experimental Station and we, among others, are excited to work with the MACH2 hub to use the hydrogen they create,” he said.
Two companies dropped out in 2024: Messer, a Germany-based supplier of industrial gases, and sHYp, which promotes decarbonization in the construction, maritime, and energy industries, are no longer part of MACH2. The net number of participants has “fluctuated slightly” since the project began, and there may be changes during Phase 1 but they are unlikely to be significant, said Matt Krayton, a spokesman for the project.
“It’s not an industry that exists today so you have to create supply-side incentives such as the 45V tax credit. But even if you produce cheaper hydrogen, where is the demand? Who is willing to buy hydrogen and how do we connect suppliers to consumers?”Mohamed Atouife, green hydrogen researcher at Princeton University’s Zero Lab.
MACH2 and the other six hubs nationwide depend, at least for now, on the federal government to fund their startups and to help link producers and consumers in what is a market in its infancy. O’Mara said. It remains cheaper for a truck operator, for example, to replace a diesel vehicle with another diesel than to buy one that’s powered by hydrogen, and the tax breaks are designed to erase that price gap. “We’re getting closer but not yet,” he said, when asked whether hydrogen hubs could survive without federal help.
Despite the Trump administration’s threats to withdraw federal funding from a wide range of recipients, MACH2 and the other hydrogen hubs depend for now on government help because they are unlikely to survive based on market forces alone, argued Mohamed Atouife, a researcher into green hydrogen at Princeton University’s Zero Lab.
“It’s not an industry that exists today so you have to create supply-side incentives such as the 45V tax credit. But even if you produce cheaper hydrogen, where is the demand? Who is willing to buy hydrogen and how do we connect suppliers to consumers?,” he said. “You want the industry to get started and to de-risk some of these projects. The good thing is that the federal government is stepping in and says it’s going to create this ecosystem and connect the two sides of equation.”
Biden promised a total of up to $7 billion in startup funds to seven hubs around the country. All have now been funded but MACH2 and one other had to wait until the very end of the Biden administration before getting their money.
Gov. Matt Meyer called the new funding a boost for Delaware. “With the potential to create over 20,000 jobs while also helping reduce energy costs and drive further technology adoption, the development of MACH2 is a win for Delaware and our region,” he said in a statement.
U.S. Sen. Lisa Blunt-Rochester also welcomed the new MACH2 funding as a step toward reducing greenhouse gases and creating jobs. “It’s critical to our environment, our economy, and our competitiveness that investments in our clean energy future, including MACH2, can continue building out its infrastructure and create good-paying jobs right here in Delaware,” she said in a statement.
But for Dora Williams of Delaware Concerned Residents for Environmental Justice, MACH2 leaders haven’t done enough to involve communities that could be affected. “Communities affected by MACH2 initiatives deserve a seat at the table to ensure that past harms are acknowledged and future actions are just,” she said. Williams’s group was one of 10 that issued a statement “denouncing” the DOE for funding MACH2.
