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California’s hydrogen hub is a public-private partnership founded in 2022 aimed at advancing hydrogen technology and developing a network of hydrogen production sites in California. Green hydrogen was part of the state’s plan to meet the greenhouse gas (GHG) emissions reduction targets of AB 1279. The 2022 Scoping Plan noted the need for “about 1,700 times the amount of current hydrogen supply.”

ARCHES is one of seven hydrogen hubs that the Biden administration selected for a $7 billion program to accelerate the commercial-scale deployment of hydrogen fuel. The Bipartisan Infrastructure Law of 2021 directed the DOE to establish these hydrogen hubs. The DOE selected ARCHES in October 2023 to negotiate federal funding and it signed a hydrogen hub cooperative agreement in July 2024.

In announcing the funding cancellation, the Department of Energy said it determined that these projects “did not adequately advance the nation’s energy needs, were not economically viable, and would not provide a positive return on investment of taxpayer dollars.”

Governor Gavin Newsom stated that the original funding agreement attracted more than $10 billion in private sector funding commitments.

“Clean hydrogen deserves to be part of California’s energy future — creating hundreds of thousands of new jobs and saving billions in health costs,” Newsom said in a release. “We’ll continue to pursue an all-of-the above clean energy strategy that powers our future and cleans the air, no matter what DC tries to dictate.”

Analysist noted the political nature of the funding cut, as all 16 states where projects were cancelled voted for Democrat Kamala Harris in the 2024 presidential election. Hydrogen projects in Texas, West Virginia, Ohio, and Pennsylvania reportedly were not cut.