Federal Energy Regulators to Assess Environmental Risks of Funding Northwest Hydrogen Hub

The U.S. Department of Energy is beginning its environmental impact assessment of “clean” hydrogen projects that have been proposed as part of a planned $1 billion in federal funding

A year after naming the Northwest one of seven new “regional hydrogen hubs” in a nationwide competition, the U.S. Department of Energy is beginning its review of possible environmental risks of developing certain hydrogen projects and is inviting the public into the process.

The review, announced Wednesday, will analyze any adverse effects from developing hydrogen projects and the impact of potential infrastructure, their scope, design and construction. But the assessments are only a first step and do not necessarily mean the projects will go forward and receive funding, the agency said. It is holding a virtual meeting for the public in January and will take comments until spring.

The projects involve the development and distribution of “green” hydrogen energy and its end users. Green hydrogen can be produced with water and used without emitting greenhouse gases. Green hydrogen energy is seen as a key source of clean energy to help reduce climate-warming emissions from sectors that currently rely on fossil fuels and are hard to electrify because of the huge amounts of energy they demand.

The Pacific Northwest Hydrogen Hub, which includes Washington, Oregon and Montana, was chosen in 2023 to receive about $1 billion in federal funding during the next decade. Companies have proposed 10 projects for the Northwest hub so far, including several hydrogen production facilities, hydrogen distribution pipelines and storage projects, and projects that would spur adoption of hydrogen-powered trucks, buses and hydrogen refueling stations, according to the U.S. Department of Energy.

The hydrogen produced in the Northwest could also be used to make fertilizer and power energy-demanding processes like semiconductor manufacturing.

By replacing fossil fuels in some transportation and in hard-to-electrify sectors, the hub could divert up to 1.7 million metric tons of carbon dioxide from entering the atmosphere each year, according to the Pacific Northwest Hydrogen Association. That’s equivalent to removing about 400,000 gasoline-powered cars from roads annually.

But the Northwest Hub has faced challenges getting off the ground, with project developers pausing plans due to unaffordable renewable energy prices as regional rates for electricity—needed to make green hydrogen—skyrocket. They’re also facing a lack of demand along with delays and confusion over a federal tax credit that was meant to spur investment and jump-start the industry.