Manhattan Institute sees little justification for Biden administration's US$7B green hydrogen subsidy, citing significant economic costs, negligible environmental benefits; hydrogen is net energy loser, requiring more energy to produce than it contains

NEW YORK , February 23, 2024 (press release) –

There is no economic path to zero-emissions hydrogen energy production, but there are substantial costs

New York, NY – In October 2023, the Biden administration announced $7 billion in subsidies for the creation of seven regional clean hydrogen hubs. This policy embodies a central tenet of the administration’s energy agenda: the pursuit of “green hydrogen,” defined as hydrogen manufactured with zero carbon emissions. In a new Manhattan Institute issue brief, adjunct fellow Jonathan Lesser analyzes the potential for green hydrogen energy. He finds little justification for the significant subsidies and tax breaks that the Biden administration has committed to it.

Assessing the economic, physical, and technological realities, Lesser demonstrates that the Biden administration’s “Clean Hydrogen Strategy” will impose significant economic costs while generating negligible environmental benefits. Biden’s green hydrogen aims face insurmountable physical barriers, assume unrealistic technological advances, and offer insignificant reductions in carbon emissions. Key findings include:

Hydrogen is a net energy loser: Unlike other dispatchable energy sources, more energy is required to manufacture hydrogen than hydrogen contains, and no technology can change this immutable thermodynamic fact.
Unachievable goal: The administration’s “Earthshot goal” of reducing green hydrogen production costs to $1/kg by 2030 is unrealistic regardless of the path.

Green hydrogen’s negligible climate impact: Even assuming the success of the "Clean Hydrogen Strategy," the annual CO2 reduction goal represents less than two days’ of the U.S. 2022 CO2 emissions and just six hours of world emissions.
Although hydrogen may be a useful alternative to batteries for long-term energy storage, Lesser points to nuclear power as a much more productive and potentially cost-effective source of zero-emissions energy.