California is following other states in a push to snare federal infrastructure money to develop the state’s hydrogen market.
Gov. Gavin Newsom announced on Tuesday that he has directed the Governor’s Office of Business and Economic Development, more commonly known as GO-Biz, to develop a hydrogen market development strategy for the state, employing an all-of-government approach.
“California is all in on clean, renewable hydrogen – an essential aspect of how we’ll power our future and cut pollution,” Newsom said. “This strategy will lay out the pathway for building a robust hydrogen market to help us fully embrace this source of clean energy.”
The state may be following others in targeting this particular funding stream, but it’s a return to a technology that former Gov. Arnold Schwarzenegger championed in 2004.
The former governor launched the California Hydrogen Highways Network at UC Davis nearly two decades ago through an executive order. The order created a public private partnership to build a “hydrogen highway” in California by 2010. Between then and now battery electric vehicles have taken prominence. And that is what Gov. Gavin Newsom has focused on with his efforts until now.
Newsom’s recently launched program will closely resemble the zero-emission vehicle market development strategy to help California collectively move forward and deliver zero-emission benefits to all Californians, according to the governor’s office.
“Hydrogen has tremendous potential to not only grow our economy but also clean our air, create family supporting jobs, and lead the nation’s clean energy transition,” said GO-Biz director Dee Dee Myers.
Advocates view hydrogen as one of the key building blocks of the transition to a cleaner energy future, particularly for sectors with difficult to abate emissions, in which renewable energy solutions such as wind or solar are less practical.
Today’s hydrogen cars use the element to generate electricity that powers the vehicles.
As with battery electric vehicles, hydrogen promises to propel vehicles without emissions, carbon or otherwise.
But each technology has roadblocks — for battery EVs, it’s the batteries, because of their cost, weight and time needed to recharge.
For hydrogen, it’s hydrogen; the universe’s most plentiful element is rare in its pure form on Earth and therefore must be refined out of molecules in processes that traditionally involve using natural gas as a feedstock, negating carbon-free status. Transportation is also expensive and energy inefficient.
The focus has turned to the development of clean hydrogen capacity, using renewable energy to power the process to extract hydrogen from other materials, will require massive investments in areas including infrastructure, electrolysis, transport and storage.
Hydrogen advocates see the technology as particularly valuable in transportation applications that are particularly challenged by the weight and recharging times of batteries, including long-haul trucking and aviation.
California’s new initiative will create a market development strategy focused on leveraging clean hydrogen to accelerate clean energy deployment and decarbonize California’s transportation and industrial sectors, according to the governor’s office.
Newsom has directed GO-Biz to develop the strategy, in consultation with state agencies including the California Air Resources Board, the California Energy Commission, and the California Public Utilities Commission, and to clearly define each agency’s roles and responsibilities, and to identify shared strategies, including financing models, permitting modifications and procurement initiatives, to deliver projects.
Newsom, who was elected to a second term in November, has been pushing throughout his term for funding to continue to build the state’s zero-emission infrastructure — including grant funding for cities to construct electric car hook-ups.
He set a target in 2020 to ban the sale of new gas-powered cars in the state after 2035.
In August, the California Air Resources Board passed a rule forcing automakers to speed up production of cleaner vehicles beginning in 2026 until sales of only zero-emission cars, pickup trucks and SUVs are allowed in the state.
EV adoption is already up dramatically in the state, where more than 292,000 battery electrics were bought in 2022, according to the California Energy Commission, plus another 50,000 plug-in hybrids that combine batteries with a gasoline engine. Only 2,574 hydrogen fuel cell cars found a home.
Market share for zero-emission vehicles has continued to increase this year, the commission said, driven by battery electrics.
Expanding the market for clean, renewable hydrogen is key to achieving California’s climate goals—especially for a clean electric grid, net-zero carbon emissions, and drastically cutting air pollution, according to the governor’s office.
The state’s application for hydrogen hub funding was led and submitted by the Alliance for Renewable Clean Hydrogen Energy Systems, which describes itself as a public private-partnership organized to create an economically sustainable, multi-sector, renewable hydrogen ecosystem.
It “was structured to enable and deliver a clean renewable hydrogen energy system in California and beyond,” said ARCHES CEO Angelina Galiteva.
“ARCHES is fully committed to continuing to work hand in hand with GO-Biz and our broad coalition of partners to accelerate California’s transition to a carbon free economy,” she said.
California joins the competition for $8 billion available in the federal government’s Infrastructure Investment and Jobs Act. The act President Joe Biden signed into law in November 2021 earmarks funding for DOE to develop six to 10 regional clean hydrogen hubs.
The first to jump at the opportunity were seven Midwest states – Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio and Wisconsin, which signed a memorandum of understanding in September creating the Midwestern Hydrogen Coalition. Five of the states’ governors are Democrats and two Republicans.
In the Southeast, Arkansas, Louisiana, and Oklahoma’s governors announced plans in December to submit an application for up to $1.25 billion in funding under the federal regional clean hydrogen hubs program. They created the HALO Hydrogen Hub in March.
Expanding the market for clean, renewable hydrogen is key to achieving California’s climate goals, which include creating a clean electric grid, net-zero carbon emissions, and drastically cutting air pollution, according to the governor’s office.
Newsom’s plan is to create a market development strategy that is focused on leveraging hydrogen to accelerate clean energy deployment and decarbonize the state’s transportation and industrial sectors.
The plan will be developed in consultation with state agencies – including the California Air Resources Board, the California Energy Commission, and the California Public Utilities Commission – while clearly defining agencies’ roles and responsibilities.
It will identify shared strategies to deliver projects, which may include new financing models, permitting modifications, and procurement initiatives; engage relevant stakeholders, including local communities, to advance equity and deliver environmental and economic benefits; and ensure state agencies and partners continue to pull in a shared direction to accelerate the use of renewable energy throughout our economy and increase the resilience and reliability of our energy system.
In addition to being in line with the governor’s efforts to create an electric car charging network across the state and his edict to require all new cars sold in the state to be electric — a category that includes hydrogen fuel cell vehicles — within the next decade, he says the hydrogen push builds on his executive order in May to create an infrastructure strike team to streamline projects throughout the state.
Newsom issued the executive order in the hope of tapping the $1.2 trillion in funding in the IIJA the federal government plans to release through 2026. IIJA has also earmarked another $391 billion over 10 years for climate-related investments.
California has augmented these federal investments with over $50 billion in state funding for infrastructure and will invest more than $180 billion over the next ten years, according to Newsom’s order.
The aim of the strike team is to clear roadblocks by streamlining regulatory processes, which Newsom’s order says have “bogged down” the state’s major infrastructure projects. It also aims to eliminate silos in permitting and regulatory approvals.
A secondary aim is to try to lessen the effect of the state’s natural disasters, which Newsom says include extreme heat, wildfires, flooding and drought, which pose “unprecedented stress to the state’s energy infrastructure, and accelerating California’s progress toward 100% clean electricity, as well as meeting our carbon neutrality goal, by 2045.”
To meet that goal, the governor’s orders says, the state needs to modernize its electric grid, and build out a safe, reliable, resilient, affordable, and clean energy system of the future.
Newsom’s order established a “senior counsel on infrastructure to lead the strike team “to work across state agencies to maximize federal and state funding opportunities for California innovation and infrastructure projects.”
The aim, according to the governor’s order, was to “identify projects on which to focus streamlining efforts, particularly those presenting significant challenges but also significant opportunities for infrastructure and job creation, and hold departments and agencies accountable to deliver results in an expedited and effective fashion.”
The hydrogen strategy will be one outcome of the strike team’s hydrogen, clean energy, transportation, and zero-emission vehicle workgroups.
“The ARCHES model provides an incredible opportunity to accelerate this market and drive down cost for everyone—while unlocking critical community benefits,” Myers said.