As we previously covered, California has been working towards the development of “green hydrogen,” i.e., hydrogen fuel produced by splitting water into hydrogen and oxygen using renewable electricity.  Most stakeholders acknowledge that green hydrogen is a critical (but predominantly untapped) resource that offers many climate and energy benefits.[1]  In a significant step to advance this goal, the California Legislature and Governor recently adopted SB-1075 with some important revisions.

The bill still requires the California Air Resources Board (CARB), the California Energy Commission (CEC), and the California Public Utilities Commission (CPUC) to consider green electrolytic hydrogen as an eligible form of energy storage and to consider other potential uses of green electrolytic hydrogen in their decarburization strategies.  However, the bill no longer requires the creation of a “Clean Hydrogen Fund,” which was a large part of the earlier version (see here for our earlier analysis of the fund).   

The following summarizes the major provisions that ultimately were made law in California.

  1. Requires CARB, in consultation with the CEC and the CPUC, and consulting the Workforce Development Board and labor and workforce organizations, to prepare an evaluation (posted to its website by June 1, 2024) of:
    • Policy recommendations to accelerate production and use of hydrogen – particularly “green hydrogen,” which the bill describes but does not define – to help achieve the state’s climate, clean energy, and clean air objectives;
    • A description of strategies supporting hydrogen infrastructure development;
    • A description of the potential for “other forms of hydrogen,” outside of green hydrogen, to achieve greenhouse gas (GHG) emissions reductions;
    • An analysis of how curtailed electrical generation could be better used to meet state goals, including the production of green hydrogen;
    • An estimate of the comparative amount of GHG emissions reductions and air quality benefits the state could achieve through deploying green hydrogen;
    • An analysis of the potential for opportunities to integrate hydrogen production and application with drinking water supply treatment needs;
    • Policy recommendations for regulatory and permitting processes associated with transmitting and distributing hydrogen; and
    • An analysis of the life-cycle greenhouse gas emissions and air pollution and other environmental impacts from hydrogen.
  2. Requires the CEC, as part of the 2023 and 2025 editions of the Integrated Energy Policy Report, to study and model potential growth for hydrogen and its role in decarbonizing the electrical and transportation sectors of the economy, and helping to achieve the various state clean energy and environmental goals.

Ultimately, California intends to “develop a leading green hydrogen industry in California in order to provide accelerated clean air, climate, and energy benefits; better integrate existing and new renewable resources into the electrical grid; support forest management, short-lived climate pollutant and waste management goals; create jobs; and provide new clean technology to decarbonize challenging sectors.” This law is a critical step forward in meeting such goals, and we will continue to closely follow this important topic in California and abroad. 

[1] The legislature highlights the benefits of green hydrogen as follows:

*Green hydrogen offers many climate and energy co-benefits, including better utilizing curtailed electrical generation and better integrating eligible renewable energy resources into the electrical grid to achieve greater than 100 percent zero-carbon energy and putting renewable generation of electricity to use to decarbonize many other sectors of the economy.

*Green hydrogen offers an opportunity to reduce emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants and improve the health of local communities located close to existing industrial hydrogen uses, including oil refining, production of ammonia, and other industrial chemical uses.

*Green hydrogen is a flexible resource that can be used for many things, including oil refining, ammonia and fertilizer production, and other industrial and chemical processes; net-zero or net-negative carbon chemicals, fuels, and polymers that can be produced when green hydrogen is combined with captured carbon dioxide; storing renewable and zero-carbon electricity for multiple days and seasons; powering a variety of on-road, off-road, rail, aviation, and maritime transport and materials handling applications; providing dispatchable electricity production including enhancing resiliency for behind-the-meter emergency backup generation and islanded microgrids; displacing coking coal used in the production of steel; fueling industrial thermal applications; and decarbonizing the existing natural gas pipeline.