Friday Fact Check: The USA Can be a Highly Competitive Clean Hydrogen Exporter

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Happy National Hydrogen and Fuel Cell Day!!

As part of National Hydrogen Day, ClearPath released a new report focused on the export opportunity for decarbonized hydrogen, going in depth on big trends. 

American Clean Hydrogen:  A Tremendous Export Opportunity
Ryan Rusali, Spencer Nelson, Natalie Houghtalen, Clear Path Action, October 8, 2021

Executive Summary

As the world moves toward a clean energy future, every clean technology tool in the toolbox will be

needed. One new area of innovation that has gained popularity in recent years is hydrogen. As many

countries begin to include hydrogen in their decarbonization efforts, a global race to supply clean

hydrogen has begun. This report considers the role the United States could play in meeting global

clean hydrogen demand through exports, as well as the rapidly developing American infrastructure

and policy environment for hydrogen. The analysis includes several key findings:

1. EU and Japan Will Face Clean Hydrogen Supply Gaps

Global demand for hydrogen could increase rapidly; however, the largest markets are likely

to face supply gaps. The European Union and Japan have the most ambitious plans to

utilize clean hydrogen for decarbonization, but their domestic production plans fall short of

potential demand.

2. Global Competitors Are Poised to Fill these Gaps

Russia, the Middle East, and Australia are positioning themselves to meet this potential

demand by creating strong, export-oriented strategies and are already signing export contracts.

3. The USA Can be a Highly Competitive Clean Hydrogen Exporter

In addition to meeting its own projected demand growth, the United States can be a highly

competitive exporter of clean hydrogen to meet supply gaps in both the European Union and

Japan. In particular, the U.S. has a cost advantage when exporting hydrogen produced from

natural gas with a high rate of carbon capture. This is due to both the low cost of natural gas

and the existing carbon capture tax credit, 45Q, which can lower the cost of production by up

to 30 percent.

4. Emerging U.S. Hydrogen Hubs Could Meet International Demand

A number of U.S. regions are well-suited to capitalize on this opportunity and become “hydrogen

hubs,” as they already have significant hydrogen production capacity, which could be converted to

clean production. The federal government can help lay the groundwork for these hubs to succeed

in a competitive future hydrogen market.