Embracing Hydrogen and Alternative Fuels
Federal award and billions in investment place the state as top hydrogen hub
Louisiana’s decarbonization strategy includes the fuels of the future, positioning the state as a continued leader in powering everyday life.
The state is seeing billions of dollars of investment and funding for fuels with both current and future applications. Renewables using biomass as feedstock have driven extensive investment, but hydrogen is the newest energy frontier. A potentially planet-alternating fuel source, Louisiana is preparing itself for increased production.
H2theFuture, Wind-Powered Hydrogen Cluster, Wins EDA Build Back Better Challenge Award
A groundbreaking plan to create an offshore wind-powered hydrogen energy industry cluster in south Louisiana received a critical injection of capital after being awarded $50 million from the U.S. Economic Development Administration’s Build Back Better Challenge.
Dubbed H2theFuture, the project was one of 21 (out of 529 submissions and 60 finalists) to be selected for funding through the 2021 American Rescue Plan competitive grant program. The $1 billion BBB initiative, which the U.S. Commerce Department described in its announcement as “the most impactful regional economic development competition in decades,” seeks to boost economic recovery and rebuild communities through “transformative investments” in regional industry clusters. The winning Louisiana proposal – led by Greater New Orleans, Inc. and its affiliate Greater New Orleans Development Foundation – creates a roadmap for decarbonizing Louisiana’s manufacturing sector while creating new energy jobs.
The 25-organization coalition that developed the H2theFuture blueprint includes south Louisiana’s regional economic development organizations and regional planning commissions; the Port of South Louisiana; four public research universities (Louisiana State University, University of Louisiana at Lafayette, University of New Orleans and Nicholls State) and four HBCUs (Dillard University, Southern University in Baton Rouge and New Orleans, and Xavier University); the Louisiana Community and Technical College System, representing eight south Louisiana community colleges; and several organizations focused on equity, including the Urban League of Louisiana and the Louisiana Parole Project.
“This infusion of federal and state dollars, on top of the nearly $20 billion of private capital investment in Louisiana emissions reduction projects announced in the last two years alone, moves us closer to the ultimate goal: net zero carbon emissions by 2050.”
- Governor John Bel Edwards
Green hydrogen is produced by splitting water (H2O) with electrolyzers powered by renewable electricity, such as wind. The carbon-free feedstock can then be used to power advanced manufacturing, commercial-scale transportation and other energy-intensive processes. A study commissioned by the coalition concluded that H2theFuture could cut Louisiana’s total hydrogen emissions in half, representing millions of tons of CO2 that would otherwise be released into the atmosphere.
The federal grant will be supplemented by $24.5 million in matching funds from the state of Louisiana, bringing the total project size to $74.5 million.
For a comprehensive overview of H2theFuture projects, including an interactive map of locations and information on all 25 program partners, visit H2theFuture.org.
CF Industries Investing Over $2 Billion in Carbon Reduction Projects
CF Industries continues to make good on its commitment to sustainability, investing over $2 billion in Louisiana projects this past year to produce ammonia for clean energy applications while also decarbonizing its production process.
Between the company’s expansion at its Donaldsonville plant and its carbon reduction investments, CF is adding 115 new direct jobs and 311 indirect jobs to the Capital Region, while retaining 521 existing jobs.
The Ascension Parish Plant will produce up to 1.7 million tons of “blue ammonia” annually, a key clean energy source for the energy transition since its components – nitrogen and hydrogen – do not emit carbon when combusted. A chemical process is considered “blue” when CO2 emissions are captured before their release into the air, making the process more carbon-neutral.
The company’s carbon technology in Donaldsonville allows up to 6,000 tons of CO2 per day – as much as 2 million tons per year – to be captured, liquefied, and transported via pipeline to a sequestration site.
In a separate but related project, CF Industries is partnering with EnLink and ExxonMobil to manage the sequestration process. CO2 emissions from the Donaldsonville facility will move through EnLink’s transit network and be permanently stored underground on property owned by ExxonMobil in Vermilion Parish. The 2 million metric tons of emissions expected to be captured annually will be equivalent to replacing approximately 700,000 gasoline-powered cars with electric vehicles.
Energy Startup Proposes $7.5 Billion Investment for Hydrogen and Ammonia
Clean Hydrogen Works announced a proposal to build a large-scale hydrogen-ammonia production and export facility in Ascension Parish. The project would establish Ascension Clean Energy (ACE) in partnership with Denbury Carbon Solutions and Hafnia.
The company estimates the proposed $7.5 billion project would create 350 new direct jobs with an estimated average annual salary of $73,412 by 2030. If the project moves forward, LED estimates 1,122 new indirect jobs would result, creating 1,472 total potential new jobs in the Capital Region.
The ACE project plan envisions production of 7.2 million tons of ammonia annually on a 1,700-acre RiverPlex MegaPark site on the west bank of the Mississippi River in Donaldsonville. Utilizing carbon capture and sequestration processes to reduce emissions would produce “blue ammonia,” a product anticipated to be in high demand as a clean energy feedstock in global markets.
Denbury would transport the captured CO2 emissions through its existing pipeline network to one of its planned sequestration sites for deep underground storage. Hafnia would export the ammonia produced at the facility to emerging energy markets overseas.
Clean Hydrogen Works said it hopes to make a final investment decision and begin construction in 2024, which would allow the initial phase of production to commence in 2027. The company estimates 1,500 construction jobs would be created at the peak of construction.
To attract the project, the state has prepared a competitive incentive package that would include the services of LED FastStart, Louisiana’s nationally acclaimed workforce development program.
At the appropriate time, the company may also utilize the state’s Industrial Tax Exemption and Quality Jobs programs. Additionally, if a final investment decision is made, Clean Hydrogen Works would be eligible for a performance-based award of up to $7 million to reimburse dock infrastructure expenses, payable over five years upon verification of job and payroll targets and river service infrastructure requirements being met.
Clean Energy Company Announces Renewable Fuels Project in Port Allen
Arbor Gas, formed in 2019, is investing $800 million in West Baton Rouge for a manufacturing and distribution facility employing carbon capture and sequestration emissions-reduction technology. Operating as Magnolia Renewable Fuels LLC, the new facility will utilize wood waste biomass sourced from Louisiana and Mississippi timber operations. Magnolia will source southern yellow pine pre-commercial thinnings, a byproduct of routine forest management operations.
Construction, which is expected to begin in late 2023, will place the company’s greenfield facility at the Port Allen Rail Terminal. This location offers railroad and highway accessibility as well as proximity to timber operations. Two product trains would initially be installed, with capacity for future expansions. Arbor Gas projects that each train will sequester approximately 275,000 tons of CO2 annually.
To secure the project, the state offered a competitive incentive package including the services of LED FastStart. The company is also expected to utilize the state’s Quality Jobs and Industrial Tax Exemption Program.