By Daniel Okafor

Pennsylvania's two federal hydrogen hubs — holding $1.675 billion in Department of Energy awards between them — have drawn only about one-fifth of their Phase One money, according to the Ohio River Valley Institute.

The Mid-Atlantic Clean Hydrogen Hub (MACH2) and the Appalachian Regional Clean Hydrogen Hub (ARCH2) were each announced in 2023 inside a seven-hub, $7 billion federal program. MACH2 took $750 million to make green hydrogen across Pennsylvania, Delaware and New Jersey; ARCH2 took $925 million for blue hydrogen, anchored on Western Pennsylvania's steel industry. Both projects were framed, in a 2023 speech at Philadelphia's Tioga Terminal, by then-President Joe Biden as transformational.

Today, neither project has momentum. "It's a drop in the bucket of the overall award," said Tom Torres, chief of staff at the Ohio River Valley Institute.

What is the current funding status?

Energy Secretary Chris Wright confirmed in April that the hubs would keep their awards. The same month, the President's Budget Request for fiscal 2027 called for "permanently cancelling" unobligated clean-hydrogen money and redirecting $1.2 billion to seven AI supercomputers at Argonne and Oak Ridge National Laboratories. The DOE did not respond to repeated requests for comment; a July apportionment plan shows no new disbursements this year.

MACH2 CEO Manny Cintron told Inside Climate News the hub's "award is active" but that partners "continue to proceed cautiously in light of the current budget uncertainty." As of late September, MACH2 was still circulating a January solicitation for additional partners — recruitment, not construction, is the visible activity.

ARCH2 has gone darker. Former partners have denied involvement or stopped returning calls.

Bottom line: funding exists on paper, but no new dollars are moving this fiscal year.

What does the 2027 tax-credit deadline mean for projects?

Producers now have until December 31, 2027 to begin construction and lock in the 45V clean-hydrogen credit — worth up to $3 per kilogram of qualifying hydrogen. That cuts five years off the original 2032 window.

"The hydrogen story is really an ammonia story, in the U.S. at least," said Anika Juhn, an energy data analyst at the Institute for Energy Economics and Financial Analysis. Ammonia — mostly fertilizer — accounts for roughly 2% of global energy consumption and 1.5% of greenhouse gas emissions. Without subsidies that close the cost gap with conventional fertilizer, Juhn said, any green ammonia the U.S. produces will end up on ships.

The 45Q carbon-capture credit remains available for blue-hydrogen projects like ARCH2 through 2033. As BloombergNEF hydrogen research lead Martin Tengler put it: "What matters in the U.S. more than hub status is whether individual projects are going ahead." Tengler noted in an email that the 45V start-of-construction test and finding offtakers remains the harder hurdle. "All these have been a challenge, except 45Q," he added.

Bottom line: the clock shortened by five years, and the only credit with slack is for carbon capture.

Why are the operators stalled?

Hydrogen economics are unforgiving on a grid still dominated by gas. Electrolysis loses about 30% of input power on its own; full-cycle losses from solar panel or turbine to fuel cell run near 70%. The U.S. currently produces roughly 10 million metric tons of hydrogen per year, almost all of it from oil and gas, and clean hydrogen remains significantly more expensive than the fossil version.

MACH2's green model also depends on solar and offshore wind buildouts that the Trump administration has effectively halted. Atlantic Shores Offshore Wind and Invenergy pulled out of New Jersey contracts in 2025, and in April the New Jersey Board of Public Utilities said it would stop building grid connections for offshore wind. ARCH2's blue-hydrogen pitch — a compliance route for oil and gas — has weakened alongside the administration's push to scrap power-plant emissions rules.

Bottom line: hydrogen math was already tough, and the policy scaffolding behind both hubs has been pulled.

What does this do to Pennsylvania's steel sector?

A lot on paper, nothing visible in practice. The state's iron and steel industry still depends on coal-fed blast furnaces — the same setup it has used for centuries. Modern direct-reduced-iron furnaces run cleaner and can be converted from natural gas to green hydrogen.

"I think it's kind of surprising to folks that we still make steel the way that you imagine in your head — big, hot furnaces, with hot metal flying everywhere, dirty coal going in, and lots of pollution," said Hilary Lewis, steel director at Industrious Labs. "That's still how we do it. It's how we've been doing it for centuries."

A reference case sits in Louisiana: the $5.8 billion Hyundai steel mill under construction there could eventually be converted to hydrogen. But Pennsylvania has neither the clean-hydrogen supply nor the new furnaces. "There are two steps to modernizing Pennsylvania's iron and steel industry," Lewis said. "One is getting clean hydrogen available. And the other is building these new furnaces to replace the existing coal-based furnaces."

Bottom line: without clean supply or new furnaces, steel decarbonization stays theoretical.

Where are the former partners going?

Data centers. At least four former ARCH2 partners — Hog Lick Aggregates, EQT, Fidelis New Energy and CNX Resources — have pivoted to gas-fired generation serving hyperscale computing load. The Adams Fork Energy Project in West Virginia joined ARCH2 in 2023 with plans for a large ammonia hub, was later dropped from the consortium, and is now being repositioned as a gas plant for a data center.

"Whenever someone's reaching out about the hydrogen hub, [I assume] something must be happening that I don't know about," Torres said. "Because it's all gas plants and data centers now."

The next milestone is the DOE's revised FY2027 spending plan — and any guidance it issues on whether unobligated balances survive into the December 31, 2027 start-of-construction deadline.