As the energy sector attempts to reduce its dependence on fossil fuels, taxpayer-funded government subsidies are incentivizing companies to invest in “green hydrogen” facilities.

Green hydrogen is created by splitting water molecules into hydrogen and oxygen through electrolysis. The extracted hydrogen can be used to power fuel cells. The process emits only oxygen and heat as byproducts, but a vast amount of energy is necessary in order to separate the hydrogen bonds.

As a result, green hydrogen facilities must operate on a large scale to be profitable.

“Until you can mass produce it, the costs are a bit high,” explained Joe Powell, director of the University of Houston Energy Transition Institute and a former chief scientist at Shell. “That’s where some of the government incentives come into play to get us over that curve.”

As part of the Infrastructure Investment and Jobs Act, the federal government allocated $8 billion of taxpayer money toward construction costs for “hydrogen hubs” and pipelines.

On December 16, the Department of Energy announced that $750 million of those funds would be available to eligible green hydrogen start-up facilities. Houston was recently invited to apply to become a hydrogen hub, as reported by The Dallas Express.

In North Texas, Air Products and AES announced the largest green hydrogen facility to date, which will cost a whopping $4 billion to develop and operate. The Wilbarger County project is estimated to begin commercial operations in 2027 and create 200 metric tons of hydrogen per day. The facility will use wind and solar energy to power the electrolysis.

Eligible hydrogen hubs that begin construction before 2033 will also receive up to $3 per kilogram of hydrogen produced within the first 10 years of operation as part of the Inflation Reduction Act.

Beyond viable energy hubs, an entire infrastructure must be created to support the new fuel source. Homes would need hydrogen fuel-cell engines to convert the energy delivered by a large network of pipelines.

The European Union has been creating this infrastructure for the past several years. By 2024, the EU plans to “install at least 6 [gigawatts] of renewable hydrogen electrolyzers.”

“They’ve been working on hydrogen in Europe for a long time, and I think we’ve got to play catch-up here,” said Hugh Daigle, an associate professor of petroleum and geosystems engineering at the University of Texas Energy Institute and a former Chevron scientist.

Despite the recent rush toward hydrogen power, extracting hydrogen from water is nothing new.

The first hydrogen-powered fuel cell was patented in 1989 by Stanley Meyer. Meyer debuted his water-powered vehicle on many local and national news stations at the time.

Unfortunately, Meyer died suddenly in 1998. His invention remained in limbo until its patent expired in 2009.

Five years after Meyer’s patent expired, Toyota developed the Mirai, which uses Meyer’s green hydrogen technology. Subsequent green hydrogen vehicles have also been developed, but less than 1,000 hydrogen cars are operational.

“They’re in the very early stages of getting that technology commercially ready for large-scale deployment,” said Michael Lewis, a researcher with the University of Texas Center for Electromechanics. “Everybody has developed one, but they haven’t really started to sell them yet.”

Despite the promises of green hydrogen, potential drawbacks of the novel technology aside from its high price are emerging.

For instance, the water used in the process of electrolysis may need to be desalinized, potentially adding exponentially to the cost of the hydrogen produced.

Additionally, hydrogen is highly flammable. When hydrogen fills a small space, a spark from static electricity is enough to ignite it, as infamously demonstrated by the Hindenburg explosion in 1937. However, the U.S. Department of Energy maintains that hydrogen fuel cells would have safeguards in place.