Indiana, Midwest states land $1 billion hydrogen hub that should mean big investment at Whiting refinery

Indiana, Illinois and Michigan are landing $1 billion in funding for a Midwest Hydrogen Hub that could safeguard the future of local industry in a world that aims to eliminate carbon emissions.

The U.S. Department of Energy announced it would fund the Midwest Alliance for Clean Hydrogen, or MachH2, hub, intended to create many sources of hydrogen production, including at the BP Whiting Refinery. The hydrogen could then be used at local steel mills to cut down on carbon emissions. 

“Today’s announcement marks the very beginning of a new era in steel production," said Cleveland-Cliffs Cliffs’ Chairman, President and CEO Lourenco Goncalves. "With Clean Hydrogen in our backyard, Cliffs’ hydrogen-ready blast furnaces and Direct Reduction plant will be first in the world to replace CO2 with a new byproduct that does not contribute to global warming: this new byproduct will be H20."

"Furthermore," Goncalves said, "Cliffs’ willingness and ability to offtake a significant portion of the entire production of the hub eliminates the chicken-and-egg dilemma associated with clean hydrogen development and, in doing so, makes hydrogen viable for other industries, including the automotive sector. Cleveland-Cliffs appreciates the efforts of Congressman Frank Mrvan and U.S. Senator Todd Young in advocating for this major clean energy investment.”

The MachH2 hub is expected to create 13,600 jobs, including 12,100 construction jobs and 1,500 permanent jobs. It's expected to generate hydrogen for steelmaking, refining, sustainable aviation fuel, glass production, power generation and heavy-duty transportation.

BP officials have said the hub could bring more jobs to the BP Whiting Refinery, which would make hydrogen to help steel mills and other local industries get to zero emissions by 2050 in keeping with global goals to combat climate change.

“We are thrilled that the U.S. Department of Energy awarded this grant to the MachH2 coalition,” said Tomeka McLeod, BP vice president–U.S. Hydrogen and CCS. “Our proposed Midwest hydrogen hub can help decarbonize America’s industrial heartland while enhancing Indiana’s economy, creating jobs and attracting new businesses and investments to the state. Governor Holcomb and the Indiana state legislature thankfully had the foresight last year to create a policy framework that allows us to seize this historic opportunity, and we are excited to do our part in making the Midwest hydrogen hub a reality.”

Purdue University Northwest, which has worked closely with industry on similar projects, also said it will play a prominent role in the hydrogen hub, which will use green energy-powered electrolysis technology to separate hydrogen and oxygen in water, resulting in clean hydrogen. 

“We at PNW are extremely proud to be part of this ground-breaking initiative that will improve the quality of life for communities throughout Northwest Indiana, the Midwest, and the country. This will also provide economic opportunities through new applications of technology that will create jobs and industrial innovations,” said Purdue Northwest Chancellor Thomas Keon. “The longtime efforts by CIVS, led by Dr. Chenn Zhou, to support decarbonization while improving steelmaking and other industrial processes, will continue to accelerate through the research led by Center for Innovation through Visualization and Simulation faculty and students.”

Zhou, the NIPSCO Distinguished Professor of Engineering Simulation at PNW and the founding director of CIVS, will be involved in both the research and the workforce development in the regional initiative to produce clean hydrogen.

“We are truly grateful to the many partners in MachH2 for making the vision to develop a Midwest Hydrogen Hub a reality,” Zhou said. “Our CIVS faculty and student researchers are excited to work with our industrial and research associates and community organizations to develop technology that will result in significant economic benefits for our regional communities and beyond. This project is projected to create thousands of jobs, improve air quality and advance regional and national sustainability goals. This furthers the wide-ranging impact of CIVS in developing innovative solutions for industry.”

The Department of Energy expects the hydrogen hubs will reduce an estimated 25 million metric tons of carbon dioxide emissions or roughly the same as 5.5 million gas-powered cars.

“This is a historic day for MachH2 and the entire Midwest,” said Dorothy Davidson, CEO of MachH2. “Our hub and the region bring an unparalleled supply of clean energy, significant regional hydrogen demand, heavy industry, and an ideal location at the crossroads of America – all of which was recognized by the DOE’s selection of MachH2. Our hub will scale the production and delivery of abundant, reliable, and increasingly affordable clean hydrogen to support our national climate goals in the coming decade, all while creating jobs and lifting up underrepresented communities that have been overburdened by pollution.”

The regional coalition behind MachH2 consists of more than 70 public and private entities. It includes BP, NiSource, ArcelorMittal, Purdue University Northwest, the state of Indiana, the state of Illinois, the Argonne National Laboratory, Chicago State University, ComEd, the Detroit/Wayne County Port Authority, Governors State University, the Illinois Institute of Technology, Nicor Gas, Northwestern University, Missouri University of Science and Technology and the University of Wisconsin-Madison.

Together, they landed a share of the $65 billion the Department of Energy is investing in clean energy as part of the bipartisan infrastructure law.

“Today’s announcement is a win for Indiana and the entire Midwest," U.S. Sen. Todd Young, R-Indiana, said. "This investment in Indiana’s hydrogen ecosystem will mean more opportunities for our Hoosier workforce and higher education system. This is exciting news and another example of how Hoosiers are leading the way in innovation, and I congratulate the entire MachH2 team.”

The administration awarded $7 billion to seven different hydrogen hubs across the country to jumpstart more hydrogen production that would help many hard-to-decarbonize industries go green. It's expected to spur more than $40 billion in private sector investment and create tens of thousands of new jobs across the country.

The administration estimates at least 40% of the benefits of the investment will flow to "disadvantaged communities that are marginalized by underinvestment and overburdened by pollution."

“We are ecstatic that Indiana is a beneficiary of this monumental investment,” Gov. Eric Holcomb said. “This funding has the potential to support the unprecedented economic investment proposed by BP that will cement Indiana’s pole position in the new energy economy. This grant could propel forward this project as a critical piece of this new hydrogen ecosystem."

The steel industry is especially pinning its decarbonization hopes on hydrogen as an alternative to the coke that's traditionally been burned in blast furnaces to make the iron that's turned into steel. Cleveland-Cliffs is building a pipeline to Blast Furnace No. 7 in East Chicago. Purdue University Northwest's Center for Innovation through Visualization and Simulation is studying how to use hydrogen in reheating furnaces at steel mills.

“Given the historical generations of Northwest Indiana’s incredible workforce and members of organized labor, manufacturing prowess and ability to collaborate, we have known the inherent value of this application since day one and its impact to create intergenerational jobs opportunities for our workforce," U.S. Rep. Frank J. Mrvan, D-Highland, said. "We would not have achieved this success without the dedicated initiative of Governor Holcomb, Senator Young, all the members of our Indiana Congressional delegation, and all of the industry partners. Let us continue to move forward with all urgency to build upon this historic achievement to grow our economy with new clean-energy jobs.”

Hydrogen is being touted as a substitute for fossil fuels like coal, coke and natural gas as it does not emit carbon.

“Unlocking the full potential of hydrogen — a versatile fuel that can be made from almost any energy resource in virtually every part of the country—is crucial to achieving President Biden’s goal of American industry powered by American clean energy, ensuring less volatility and more affordable clean energy options for American families and businesses,” said U.S. Secretary of Energy Jennifer Granholm. “With this historic investment, the Biden-Harris Administration is laying the foundation for a new, American-led industry that will propel the global clean energy transition while creating high quality jobs and delivering healthier communities in every pocket of the nation.”

Like the other hydrogen hubs that won federal funding, MachH2 is a regional bid that includes Indiana, Illinois, Michigan and institutions from other Midwestern states like Wisconsin and Missouri. The separate Indiana-led Midwest Hydrogen Corridor Consortium joined up earlier this year with the Midwest Alliance for Clean Hydrogen to collectively create a stronger bid.

“I couldn’t be prouder that once again, Illinois and the Midwest will be leading the way in equity-conscious clean energy development through the construction of a major hydrogen production and distribution hub,” said Illinois Gov. JB Pritzker. “When I signed the Climate and Equitable Jobs Act in 2019, it was with this sort of collaborative, economically sound manufacturing and expansion in mind, and we are seeing the results of those efforts play out every day. We’re grateful that the Biden administration has recognized our regional strength in workforce, education, and innovation, and look forward to working with MachH2 and our neighboring states to continue this project.”

Chris Chyung, the executive director of Indiana Conservation Voters, said it was important that the funds be administered judiciously to reduce industrial pollution as much as possible.

“President Biden's Bipartisan Infrastructure Law could be a game-changer for Hoosiers, but now comes the hard part: implementing programs like hydrogen hubs to ensure emissions reductions, create high-road jobs, and benefit disadvantaged communities," he said.  “MachH2 and its supporting entities must engage with stakeholders across Indiana in order to create the cleanest, most economical, and smartest options in the production and use of hydrogen, such as for supporting our steel economy. Indiana Conservation Voters and our partners look forward to bridging divides between industry, workers, and the environment now that MachH2 has been awarded federal funding.”