US plans $1bn of subsidies for clean hydrogen users as production tax credit fails to attract sufficient offtakers

The US government is planning to introduce $1bn of subsidies to encourage the use of clean hydrogen as part of its $7bn H2Hubs programme, having identified a lack of offtakers to be a major bottleneck for projects. While the US initially drew fanfare with a clean hydrogen production tax credit worth up to $3/kg, the anticipated flood of investment from green and blue H2 project developers has not yet arrived. According to government statistics, around 12 million tonnes per annum of production capacity was announced as of late 2022, but only 10% has reached final investment decision (FID).

This is why the DOE has filed a notice of intent, which includes a consultation running up to 24 July, to provide $1bn of demand-side subsidies. However, it has not yet decided on a mechanism of awarding this support or what form the subsidy will take.

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