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Why Biden administration allocated $7 billion to one sector: 'A range of first-of-its-kind challenges'

"The hubs can act as engines for kick-starting how these types of challenges can be sorted through."

"The hubs can act as engines for kick-starting how these types of challenges can be sorted through.”

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President Joe Biden has announced the next step in the United States' transition to clean energy sources with $7 billion made available for hydrogen projects. 

According to Bloomberg, the funding will support the goal of bringing "hydrogen hubs" — for the production and use of hydrogen gas — across the country.

"President Joe Biden is set this week to announce as much as $7 billion in funding for hydrogen projects across the country as part of a competition to jump-start production of the clean-burning fuel in the U.S., according to people familiar with the matter," Bloomberg reported ahead of the announcement.

Hydrogen is a source of energy that produces zero carbon pollution, but the cost of creating it is high, and as it stands, electricity is required to do so. Since electricity is still widely made via the use of coal and natural gas, there is still an element of dirty fuel required in the overall process — but utilizing solar and wind power instead is an option. 

But it's hoped the new hubs will make it significantly cheaper to deliver hydrogen gas, with an 80% reduction leading to a price of $1 per kilogram, as Bloomberg reported. 

The publication noted the Department of Energy sought applications from 33 projects in addition to 79 already submitted proposals. Of those would-be hydrogen producers, only six to 10 will receive access to the allocated funds.

The Department of Energy has noted that hydrogen production could reach 10 million tons by 2030 despite almost no hydrogen being produced at the moment. 

The Department also said that in addition to making hydrogen gas, the hubs could help in the development of early-stage technologies, like electrolysis, which would contribute to the overall clean-energy-creation goal. 

Alex Kizer, a senior vice president at Washington nonprofit Energy Futures Initiative, told Bloomberg: "Clean hydrogen faces a range of first-of-its-kind challenges, including cost and business models. The hubs can act as engines for kick-starting how these types of challenges can be sorted through."

The Biden administration has introduced a number of policies and incentives in the quest to decarbonize power in the United States. 

Among them, the Inflation Reduction Act provides funding and tax credits for the production of electric vehicles and electric vehicle batteries, solar power, and wind power, in addition to carbon capture.

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