Labor Unions at the Center of DOE’s $7 Billion Clean Hydrogen Hubs Program

The Biden Administration has announced seven selectees for the Department of Energy (DOE)’s $7 billion Regional Clean Hydrogen Hubs, and there are serious implications for labor and workforce stakeholders.

Clean hydrogen, an energy product that can decarbonize fossil-fuel-intensive sectors of the economy, is a part of the Biden Administration’s approach to helping America achieve its net zero goal – cutting greenhouse gas emissions to as close to zero as possible by 2050.

Funded through the Infrastructure Investment and Jobs Act, DOE’s Regional Clean Hydrogen Hubs program will create a national network of producers, consumers, and intermediary organizations to accelerate the nation’s production, storage, delivery, and consumption of clean, affordable hydrogen. It’s the latest program to support the Energy Department’s Hydrogen Shot goal which aims to reduce the cost of hydrogen to $1 per kilogram by 2031.

The hubs will target sectors that are difficult to decarbonize and electrify such as heavy-duty, long-distance transportation, steel, cement, and chemical manufacturing, and the production of liquid fuels. These sectors represent around thirty percent of total U.S. carbon emissions. The hubs’ footprint span at least thirty states with a goal of contributing to “Bidenomics,” the White House’s approach to growing the U.S. economy from the middle out and the bottom up.

The hubs will leverage federal funding to secure $40 billion in private investment to maintain and create jobs in the emerging hydrogen industry. The goal is for the hubs to be self-sustaining entities that operate independently of federal funds leading to long-term impact.

During a national briefing on the labor and workforce impacts of the hub, Energy Department officials emphasized the important role labor unions will play in ensuring that the hydrogen industry is made up of quality jobs with smooth workforce transition pathways, especially for workers in transition-impacted industries such as coal.

“Labor folks in particular have a lot riding on the hydrogen economy,” said Betony Jones, Director of DOE’s Office of Energy Jobs during the briefing, “it’s an opportunity to retain high-wage, union jobs as we transition to clean energy. These hubs represent a significant opportunity to build a whole new industry.”

To see through its vision, the Energy Department is requiring community benefits plans for the Regional Clean Hydrogen Hubs, along with all Bipartisan Infrastructure Law and Inflation Reduction Act funding opportunities and loan applications.

The community benefit plans are based on a set of four core policy priorities: investing in America's workforce; engaging communities and labor; advancing diversity, equity, inclusion, and accessibility; and implementing Justice 40. These key principles, when incorporated comprehensively into project proposals and applications and executed upon, will help ensure broadly shared prosperity in the clean energy transition.”

While agency officials acknowledged during the briefing that some of the Hubs have room for improvement, over 65 labor organizations signed letters of support for hubs that were selected, and at least three hubs stipulate plans to conclude project labor agreements (Mid-Atlantic, California, and Pacific Northwest hubs).

20 percent of the Clean Hydrogen Hub proposal scoring was based on the up-front commitment to engage with labor and community organizations to engage underrepresented workers.

Before the selectees receive funding, the Energy Department will spend the next several months negotiating cooperative agreements with a goal of including legally enforceable agreements to see through the Biden Administration’s labor vision, including collective bargaining agreements and community benefit agreements.

The agency describes four priorities for hubs’ community benefit agreements including engaging communities and labor; investing in America's workforce; advancing diversity, equity, inclusion, and accessibility; and implementing the Justice40 Initiative, an Executive Order that aims to ensure that forty percent of the overall benefits of certain federal investments flow to disadvantaged communities. Energy Department officials have produced guidance and a webinar series outlining the role of the community benefit plans for the hubs available here.

What is especially noteworthy is that even after the initial negotiation is completed, the Department has structured the Clean Hydrogen Hubs program to include several “go/no-go” review periods in which agency officials will review compliance with labor and community benefit goals before issuing subsequent funding is awarded to the hubs.

Unions are having a come-back moment in the United States, and they will be key to ensuring that federal investments in regional innovation like the Clean Hydrogen Hubs lead to an equitable innovation economy in which more Americans can benefit from advances in technological innovation.

American support for unions has been rising since 2009, and an August 2023 Gallup poll suggested the public is rallying behind expanding union influence with two out of three Americans supporting unions.

President Biden who has taken a position as the “most union-friendly president in American history” became the first sitting U.S. president to join picket lines alongside workers participating in the United Auto Workers Strike where concerns about union members losing out in the transition to electric vehicles was a point of contention.

Unions have been front and center in the debate around AI in the workplace as seen by the recently signed agreement by the Writers Guild of America in Hollywood around concerns of AI adoption by employers in the entertainment industry.

While much work is needed to ensure that implementation reflects the vision outlined by the Biden Administration, signs point to strong indicators that labor leaders will have a meaningful role in shaping the job creation and retention, upskilling, and workforce pathways needed for successful hubs that lead to inclusive economic growth in the hydrogen economy.

Labor and workforce leaders are encouraged to begin engaging with hub leaders as the department advances its contract negotiation process with selectees.