How California is Leading America's Hydrogen Economy

Renewable Energy / August 29, 2023

The Golden State has emerged as the nation’s leader in environmentally conscious energy. Thanks to policies and regulatory boards for building infrastructure (like CARB), California has staked its claim as a trailblazer in the field – and it’s no different for the state’s hydrogen economy. In fact, California’s lead is even greater within the sector.

California has made significant strides in passing legislation, fostering job growth, and constructing dedicated hydrogen infrastructure. This concerted effort is driven by the nation's most experienced and knowledgeable hydrogen fuel experts. Frankly, no other state comes close.

Let’s talk about some recent highlights of California’s hydrogen economy achievements.

Hydrogen-Friendly Legislation

Among the most exciting news related to California’s leadership of the hydrogen economy is the recent passing of SB 1075 on August 30, 2022 by the State Assembly. Signed into law on September 16, 2022, SB 1075 establishes the “Clean Hydrogen Hub Fund” to help subsidize green hydrogen projects.

Although available amounts aren’t yet determined, this fund will be administered by the California Infrastructure and Economic Development Bank. It exclusively supports projects that:

“Demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen.”
“Advance progress toward a goal to produce or use 15,000 tons per day of clean hydrogen in California by 2030.”

Notably, the requirements state that the hydrogen must be “clean,” – meaning projects will also support other renewable energy infrastructure and technology. For example, renewables like solar energy and wind power are necessary for producing emission-free green hydrogen via electrolysis.

However, SB 1075 is not the only hydrogen-friendly legislation California has enacted. Per the U.S. Department of Energy’s Alternative Fuels Data Center, roughly 50 laws, regulations, and incentives support the hydrogen economy.

This legislative momentum shows no signs of stopping. More fuel-conscious acts are coming, including SB 1329’s proposed annual commitment of $30 million targeting the expansion of hydrogen fueling networks.

2023 Update: Gov. Newsom's Strategic California Initiative

Governor Gavin Newsom has initiated a strategy to propel California's hydrogen economy forward. This plan, led by the Governor’s Office of Business and Economic Development (GO-Biz), aims to build a substantial market for clean hydrogen, similar to the approach taken for zero-emission vehicles.

The Hydrogen Market Development Strategy will involve collaboration with state agencies like the California Air Resources Board and the California Energy Commission. It focuses on speeding up clean energy adoption and reducing carbon in transportation and industries.

By expanding the use of clean hydrogen, California strives to achieve climate goals, including a clean electric grid, zero carbon emissions, and reduced air pollution. The strategy aligns with a bid to secure federal funding for creating hydrogen hubs across the U.S., using $8 billion from the Bipartisan Infrastructure Law.

Federal Support for California’s Hydrogen Economy

SB 1075 and other legislation reaffirm California’s commitment to developing its hydrogen economy, meeting emissions targets, and reducing the impact of climate change. These goals provide their own benefits, but pursuing them also firmly positions the state to benefit from federal funding.

In particular, 2021’s Infrastructure Investment and Jobs Act (IIJA) dedicates $8 billion to developing US clean hydrogen hubs. In addition, the Department of Energy has named nine regional clusters currently operating in the US to determine hydrogen funding allocations. Of them, California is the only state identified as its own cluster.

Moreover, the IIJA also allocates another $1.5 billion in funding as follows:

$1 billion: Clean Hydrogen Electrolysis Programs will help reduce production costs
$500 million: Clean Hydrogen Manufacturing and Recycling Initiatives benefit equipment manufacturing and supply chains

Careers in Clean Energy

Of course, a thriving economic sector creates (and requires) jobs. Overall, California employs the largest number of workers in the clean energy sector, with 885,539 per the 2022 US Energy & Employment Report. The state’s clean energy jobs comprise 11.3% of the nation’s total alone and 5.2% of all statewide employment.

New legislation will further expand clean energy job growth as more opportunities emerge from the dedicated funding. Hydrogen production plants, refueling networks, and transportation will all require skilled and unskilled labor hires that add more jobs and benefit the economy.

But California’s sector had already grown well before recent bills began passing. For example, nearly 30,000 new clean energy jobs were created last year, demonstrating 3.4% growth. And this job growth occurs despite pandemic-related setbacks. Moreover, another report states that since the sector’s unemployment peaked in May 2020, job growth has reached 13%, doubling California’s overall economic recovery.

The same report also shows:

California has almost six times as many clean energy jobs as those in fossil fuel extraction and generation.
California’s clean energy employment outnumbers its totals for nurses, accountants, lawyers, software designers, or truck drivers.
California’s average clean energy wages are almost 30% higher than statewide averages.

Supportive legislation is crucial for growing California’s hydrogen economy but needs to be backed by industry action. Job growth provides one of the most straightforward metrics to indicate the sector is continually expanding.

Leaders in Hydrogen Infrastructure

Today, California boasts the largest hydrogen fuel network in the US. In fact, it’s the only publicly available hydrogen fuel network. Established goals target 200 hydrogen stations in California by 2025 and 1,000 by 2030. As the number of hydrogen fuel cell cars (like the Toyota Mirai) on the road rises and hydrogen fueling costs fall, continued adoption depends on this network.

These stations will support the broader hydrogen economy and implement emissions reduction strategies in other industries. Hydrogen offers the best alternative fuel for energy-intensive industries like transportation and construction, which will find meeting goals on solar, wind, and similar renewables challenging.

However, if SB 1329 and future legislation are enacted, the $30 million set aside for clean hydrogen projects will make these targets more achievable.

The Angeles Link Project

The most impressive California hydrogen project currently underway is the Angeles Link. First announced in early 2022, this project would build the nation’s most extensive green hydrogen infrastructure system in Southern California. As a result, it will substantially reduce the state’s reliance on fossil fuels, particularly around Los Angeles.

The pipeline the Angeles Link will create is crucial for further increasing hydrogen fuel adoption. The challenge with providing green hydrogen to Los Angeles is that demand is the most concentrated in urban areas. However, the wind and solar farms that can power electrolysis are found well outside them. Constructing extensive pipeline infrastructure eliminates this problem.

Projected benefits of the Angeles Link project include:

Replacing 25% of natural gas consumption
Closing the Aliso Canyon natural gas storage facility
Replacing 3 million gallons of diesel fuel consumed daily by large trucks
Reducing the annual release of NOx smog—a significant health hazard—by 25%

FASTECH: Providing Renewable Energy Solutions

California’s hydrogen economy growth is multifaceted. It needs legislation, job growth, and infrastructure to be successful. But the state already leads the nation in most (if not all) hydrogen fuel statistics. And progress in one of these areas only stimulates growth for the others and clean energy overall.

When it comes to building hydrogen infrastructure, FASTECH is the best EPC (engineering, procurement and construction) and maintenance solution provider available. Having built over 30 hydrogen fueling stations, FASTECH is a hydrogen infrastructure leader – and we’re just getting started.