Boosting Production of Clean Hydrogen is Key Plank in the Strategy

Last week, the Biden administration made a number of policies announcements that if executed could transform US manufacturing, reducing CO2 emissions and requiring lots of new US factories.

The CO2 impact could be huge, with the manufacturing sector estimated to produce about 20% of greenhouse gasses worldwide.

This in fact is aggressive “industrial planning” writ large, probably at a scale never seen in the history of the United States.

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“In order to bring new technologies to market, Washington is willing to act as an investor, matchmaker, and consumer for fledgling innovations,” wrote Robinson Meyer of The Atlantic magazine about the Biden plans.

The challenge: figuring out how to make chemicals, fertilizer, concrete, steel and other metals and more in a low or even zero carbon way. Today, fossil fuels are widely used as feedstocks or to produce the heat needed to drive manufacturing processes.

Key elements of the Biden program include:

• The government will spend $9.5 billion 2025 to increase hydrogen production in the United States, as a fuel alternative to carbon-based sources. In parallel, the US Department of Energy has a goal of reducing the cost of making hydrogen with renewably produced electricity at least 80% by the end of the decade, about which time hydrogen should be become price-competitive with fossil fuels.

• Interestingly, the majority of the newly announced funding (about $8 billion) will be used not to fund research as is usually the case with such programs but to build hydrogen-producing factories instead. That includes the construction of four new “Hydrogen Regional Innovation Hubs” across the country, as part of a Department of Energy program.

• Another Department of Energy program will spend $$1 billion to reduce the cost of hydrogen electrolysis, the process of using electricity to split water into its components oxygen and hydrogen.

• The Biden administration also announced it is launching a new “Buy Clean” task force, with the mission to leverage government’s procurement spend to purchase low-carbon steel, concrete, and asphalt, helping to accelerate the market.

“An American firm would have a major advantage if it was the first to market with a zero-carbon concrete,” Meyer notes.

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• The Buy Clean task force will also work to calculate the CO2 emissions produced in the manufacturing of different products in the US. This can help government decision-making, and importantly help the US negotiate trade deals.

It turns out that many of the new Biden policies have bipartisan backing, passed in last year’s infrastructure bill that included many votes from both parties.

Will all this happen? Will it work? Those are the trillion dollar questions, but it seems clear the country that can crack the code will reap some significant economic gains, with many new factories or production line revamps.

What are your thoughts the Biden plan? Will it help US manufacturing? Let us know your thoughts at the Feedback section below.

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