The plan to establish a hydrogen hub in Appalachian regions—comprising western Pennsylvania, Ohio, and West Virginia—is facing significant hurdles.
A recent study reveals that a third of its projects have been canceled, and four key development partners have exited the initiative. Concerns about sufficient end-user demand for hydrogen fuel and uncertainties around federal tax credits have been cited as major issues by the Ohio River Valley Institute, which published the findings.
The Appalachian Regional Clean Hydrogen Hub, or ARCH2, was backed by federal support, aiming to generate, distribute, and consume hydrogen while fostering job creation and reducing carbon emissions in the region. The projects included within this hub aimed to capitalize on either green hydrogen, which utilizes carbon-free energy, or blue hydrogen, derived from burning natural gas. Despite aspirations to benefit both economically and environmentally, the project has faced criticism for its feasibility and sustainability.
Critics argue that blue hydrogen may contribute more to the ongoing climate crisis. Sean O’Leary of the Ohio River Valley Institute critiques the initiative’s high costs and uncertain demand, suggesting that the hub’s impacts might be negligible. ARCH2 counters these claims, stating that project evolutions are inevitable due to the nature of innovative, large-scale endeavors. The organization remains committed despite the departure of partners who had not attracted federal funding.
Presently, only oil refining and ammonia production are assured markets for hydrogen, according to Energy Innovation Policy & Technology. Other sectors like steel production and long-haul shipping possess potential but are far from guaranteed. This uncertainty impacts financial backing and the attractiveness of investing in hydrogen projects.
