05/08/2026
The Appalachian Hydrogen Hub: What’s Next?
by Tom Torres
Apr 30, 2026 | Blog Posts, Hydrogen & Carbon Capture
Last week, the Department of Energy finally announced the results of its eleven-month review of over 2,200 DOE-funded projects. According to an accompanying spreadsheet shared with Congress by Energy Secretary Wright and first published by Latitude Media, the agency intends to retain or modify its funding agreement with the Appalachian hydrogen hub, also known as ARCH2. No information is available regarding what this designation means but a spokesperson for the hub has since confirmed the news.
Modification of the hub could involve revising the amount of funding awarded to the project or changes to the cooperative agreement outlining the hub’s plans. A recent proposal from the agency points to another potential modification to the hub’s plan, one that is in line with trends in the Ohio River Valley.
Earlier this month, the Department of Energy shared a budget request with Congress that included a proposal to reallocate funds from the Regional Clean Hydrogen Hubs program for use in a new baseload power initiative. This effort seeks to support and expand gas, coal, and nuclear generation to help meet expected demand for data centers and would likely pull from funding previously awarded to three now-canceled projects: ARCHES, the California-based hydrogen hub; PNWH2, the hydrogen hub in the Pacific Northwest; and a demand-side initiative to drive commercial offtake of hydrogen.
While there is no indication that the Appalachian hydrogen hub will be modified to reflect the current push for data centers, four current and former hub developers are already exploring this market. If, on the other hand, the agency decides to retain the funding agreement as currently written, project backers face a difficult road.
The hydrogen hub has all but dissipated
At the time of writing, no more than three percent of the hub’s planned hydrogen production appears to be in active development. Plus, impacts to agency capacity and the uncertainty experienced by prospective hydrogen developers — partly a reflection of the agency’s lukewarm stance on low carbon hydrogen technology — are likely to discourage many developers from making meaningful commitments.
We’ve long maintained that the hydrogen hub was unlikely to materialize, especially at the scale that its supporters promise. Despite the availability of lucrative tax credits and significant political support in our region and, previously, at the federal level, the developers driving the hub would need to overcome high costs and a lack of demand for low carbon hydrogen in order to get a foothold in most of the sectors these projects were targeting. Even the boosters pitching the technology acknowledge that existing subsidies are not enough to make hydrogen viable for most applications, which is why all seven hydrogen hubs asked the Department of Treasury for more funding just four months after receiving their federal designation.
When the application for ARCH2 was approved, eight hydrogen producers were set to produce more than 2,100 tons of low carbon hydrogen per day. However, since the announcement of the award, CNX suspended its project over a year ago, EQT indicated that its project is still under evaluation, and Fidelis New Energy recently asked regulators in West Virginia to suspend review of an air permit application for its hydrogen facility. These three companies likely would have been responsible for an estimated 97% of the hub’s planned production, meaning that almost none of ARCH2’s planned production is in active development.
A fourth producer, Keystate Natural Gas Synthesis, would likely contribute an additional 5%. However, the company has yet to secure enough funding for a final investment decision on its hydrogen facility and it has also pushed back its operational date by five years. The remaining four producers, including the struggling Empire Diversified Energy, would likely produce a negligible amount of hydrogen.
New headwinds for hydrogen
In the fifteen months since the Trump Administration returned to the White House, the future for hydrogen production has only become more challenging. Early executive actions, like the pause on IRA/BIL spending and the termination of equity-related initiatives, significantly affected hub activities. The impact of these decisions can be seen in the federal spending record, which indicates that only about half a percent of the hydrogen hub’s $925 million award has been spent.
Since then, the hydrogen hub has had to contend with a substantial cut to the hydrogen tax credit, reported threats of cancellation, a missed deadline in the hub’s environmental review, and the termination of the office responsible for managing the hydrogen hub program. Meanwhile, other regions have seen numerous natural gas-powered hydrogen projects cancelled or suspended.
Treat everything as if it were a nail
Amid these mounting setbacks, the Appalachian hydrogen hub has not shared a meaningful project update in over a year and a half. In reality, however, what the hub wants to do doesn’t really matter.
As discussed above, the DOE funding is unlikely to meaningfully improve the hub’s viability and political interest has now, regrettably, turned towards advancing large natural gas-powered data centers, a gravity sink that has managed to attract five current and former hub developers: CNX Resources, EQT, Fidelis New Energy, Hog Lick Aggregates, and TransGas Development Systems.
While this shift may reflect a loss for the hydrogen hub, it points to the success of the real underlying project. Whether it was the failed petrochemical renaissance, the Appalachian Storage Hub that never materialized, a hydrogen hub that fell apart almost as soon as it was announced, or the current scramble to build large data centers, these concepts are evidence of a persistent — and pernicious — interest: the continued extraction and use of natural gas in Appalachia. In this way, rather than interrupt the momentum behind the hydrogen hub, the emergence of data centers is only the latest iteration of a long-running effort to preserve the natural gas industry.
As early as sixteen months prior to the launch of the hydrogen hub program, numerous entities were already pitching natural gas-powered hydrogen proposals. This left little room for genuine clean energy alternatives that could reduce industrial carbon emissions — the stated objective of the Appalachian hydrogen hub — while also protecting public health and the environment and minimizing costs to ratepayers and taxpayers.
The inability to look at the Ohio River Valley as anything other than a site of extraction and pollution reflects a profound lack of political will. That the hydrogen hub has all but evaporated should be cause for relief. Instead, it appears that the project’s leadership is set to begin anew, locking us into another cycle of contending with Appalachia’s fossil fuel problem when we could be building a brighter future for the people who live here.
ARCH2's retain/modify designation could lock us into another cycle of contending with Appalachia’s fossil fuel problem when we could be building a brighter future for the people who live here.
