DOE updates Liftoff report on pathways to clean hydrogen
17 January 2025
The US Department of Energy (DOE) recently released its latest Pathways to Commercial Liftoff report, an update to the Pathways to Commercial Liftoff: Clean Hydrogen report, which was first released in March 2023 at the of the Liftoff effort.
The US clean hydrogen market is poised for rapid growth, accelerated by commitments such as the Infrastructure Investment and Jobs Act’s Regional Clean Hydrogen Hubs, the Inflation Reduction Act’s Clean Hydrogen Production Tax Credit (45V), and DOE’s ongoing programs for research, development, demonstration, and deployment of clean hydrogen technologies.
The Loan Programs Office’s investment activity supports at-scale clean hydrogen deployment, including a $1.04-billion conditional commitment to a natural gas pyrolysis project with Monolith, a $504.4-million loan guarantee to an electrolysis and energy storage facility with Mitsubishi Power Americas, Magnum Development, and Haddington Ventures, and a $1.66-billion loan guarantee to finance up to six electrolysis projects nationwide with Plug Power–the latter of which was just announced. ( Earlier post.)
The newly updated Pathways to Commercial Liftoff: Clean Hydrogen report complements these efforts by addressing four major updates since the original report that will impact the timing of Liftoff.
Over the last year, total announced clean hydrogen production capacity has increased 26% to 14 million metric tons per annum (MMTpa) based on private sector announcements. This increase does not include the additional 3 MMTpa target capacity from DOE’s Regional Clean Hydrogen Hubs (H2Hubs).
Few projects have advanced to FID due to increased production costs, anticipation of the final rule for the Inflation Reduction Act’s 45V Tax Credit (45V), which the Treasury Department and IRS issued at the beginning of 2025, and lack of offtake agreements. As a result, 7-9 MMTpa of announced capacity is forecasted to come online by 2030.
Electrolytic hydrogen production cost estimates have increased to $5-7/kg—exclusive of 45V tax credits. Low-carbon reformation-based hydrogen production cost estimates have increased to $1.8-2.2/kg—exclusive of 45V and 45Q tax credits.
Low-carbon reformation projects can target large, industrial offtakers in the chemicals and refining spaces, which currently utilize 10 MMTpa of unabated fossil-based hydrogen in the United States.
Electrolysis projects can target emerging applications in which end users might have a higher willingness to pay or can stack additional incentives. These applications include clean fuels in states or countries with low-carbon fuel standards.
Export markets with demand subsidies could also play an increasingly important role in clean hydrogen production scale-up.
Promising clean hydrogen production technologies continue to develop, such as methane pyrolysis and drilling for geologic hydrogen. These new pathways will play a meaningful role in the commercial liftoff of clean hydrogen in the years ahead, although their production costs and carbon intensities are still to be determined.
This update marks the fifteenth installment in the Department of Energy’s Pathways to Commercial Liftoff series. The Liftoff series combines best-available data from across DOE other federal agencies with on-the-ground insight and realities from the private sector to develop a roadmap for how and when transformative clean energy technologies can reach full-scale deployment. These reports serve as “living documents.” This update serves as an analytical refresh of the original Clean Hydrogen Liftoff report, published in March 2023.
Posted on 17 January 2025 in Hydrogen, Hydrogen Production, Market Background
greencarcongress.com |
