California’s state government has announced it will develop a hydrogen market development strategy to accelerate development of renewable H2.

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“California is all in on clean, renewable hydrogen — an essential aspect of how we’ll power our future and cut pollution,” said the state’s governor, Gavin Newsom.

The plan, to be written by the Governor’s Office of Business and Economic Development (GO-Biz), will be developed in consultation with state agencies including the California Air Resources Board (CARB), the California Energy Commission and the California Public Utilities Commission.

New financing models, adjustments to permitting and procurement initiatives to drive hydrogen projects forward could all be included in the plan, which will also build on the state’s zero-emission vehicle (ZEV) strategy that made California the only market for fuel-cell electric vehicles (FCEVs) in the US.

Last November, the CARB published its so-called Scoping Plan for Achieving Carbon Neutralityfor the state up to 2045, setting hydrogen use targets in sectors such as shipping, aviation and rail transport, as well as process heat for industry and blending 20% H2 into the fossil gas grid.

While Newsom’s announcement would imply that only renewable hydrogen will be supported in the new strategy, the CARB’s scoping plan also admitted that its ambition end-use targets would require blue hydrogen, produced from fossil gas with CCS, to fill the gap when there is a lack of available green H2 supply.

“This strategy will lay out the pathway for building a robust hydrogen market to help us fully embrace this source of clean energy,” Newsom added.

The governor in 2020 signed an executive order mandating that all in-state sales of new passenger cars and trucks be for zero-emission models by 2035, while also requiring all medium- and heavy-duty trucks operating within the state to be zero-emission where feasible by 2045.

But even before then, the state of California had a low-carbon fuel standard introduced in 2009, which generates credits for users of fuels with low carbon intensity compared to gasoline and diesel.

Between these laws and subsidies, California has seen 16,776 FCEVs sold or leased as of July 2023, with 59 operational filling stations according to data from the Hydrogen Fuel Cell Partnership. However, while sales are starting to pick up, battery-electric vehicles made up around 21.1% of vehicle sales in the state in the first six months of this year, compared to FCEVs 0.2%.

California is also expected to win up to $1bn in federal funding for the set-up of a Regional Clean Hydrogen Hub — one of the few states to apply solo as the Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES) project.

The Department of Energy will select the six to ten hubs this autumn, but recent Rystad analysis indicates that ARCHES is very likely to be chosen.