Seven Hubs, $7 Billion, and a Legal Firestorm: What Happened to the Hydrogen Economy the U.S. Was Supposed to Build

In October 2023, President Biden stood at the podium and announced one of the most ambitious clean energy bets in American history: $7 billion for seven regional hydrogen hubs that would collectively demonstrate clean hydrogen production, delivery, storage, and end-use at scale. The hubs spanned both coasts, the Gulf, Appalachia, the Heartland, and the mid-Atlantic. They represented red-state and blue-state projects alike, powered by nuclear, natural gas with carbon capture, renewables, and biomass. The bipartisan infrastructure law that funded them had passed with Republican votes. Industry projections estimated 330,000 jobs.

Eighteen months later, the program is in shambles. Two hubs have been cancelled outright. Two more face uncertain futures. Only $170 million of the $7 billion has actually been disbursed. Federal courts have weighed in. Thirty-five senators have accused the Department of Energy of breaking the law. And the hydrogen industry — which was supposed to be the next pillar of American energy dominance — is watching its federal lifeline fray.

This is not just a story about hydrogen. It is a case study in what happens when long-horizon infrastructure programs collide with political transitions, and what grant-funded organizations in every sector should learn from it.

The Original Seven: A Quick Primer

The Bipartisan Infrastructure Investment and Jobs Act of 2021 authorized DOE to spend $7 billion establishing regional hydrogen hubs through a competitive selection process. After reviewing 79 applications, DOE announced seven winners in October 2023. Each hub was structured as a multi-phase program: Phase 1 for planning and community engagement, Phase 2 for detailed design, and Phase 3 for construction and operations.

ARCHES (Alliance for Renewable Clean Hydrogen Energy Systems) — California. Award: $1.2 billion. Focused on green hydrogen from renewables, targeting ports, heavy trucking, and power generation across the state. Led by a consortium of utilities, transit agencies, and industry partners.

Pacific Northwest Hydrogen Hub (PNWH2) — Washington, Oregon, and parts of Montana. Award: $1 billion. Emphasis on electrolytic hydrogen using the region's abundant hydropower. End uses included maritime, aviation, and industrial decarbonization.

HyVelocity Hub — Gulf Coast (Texas and Louisiana). Award: $1.2 billion. The largest hub by production volume, leveraging the region's existing hydrogen infrastructure, natural gas feedstocks, and petrochemical demand. Primarily blue hydrogen with carbon capture.

ARCH2 (Appalachian Regional Clean Hydrogen Hub) — West Virginia, Ohio, Pennsylvania, and Kentucky. Award: $925 million. Blue hydrogen from natural gas with carbon capture, targeting Appalachian industrial clusters and positioned as an economic transition strategy for coal country.

Midwest Alliance for Clean Hydrogen (MachH2) — Illinois, Indiana, and Michigan. Award: $1 billion. A diversified portfolio including nuclear-powered electrolysis at existing plants, renewable hydrogen, and recycled hydrogen from industrial processes.

Heartland Hydrogen Hub — Minnesota, Montana, North Dakota, South Dakota, and Wisconsin. Award: $925 million. Centered on clean hydrogen production from wind, nuclear, and biomass resources for fertilizer production, reducing agriculture's carbon footprint.

Mid-Atlantic Clean Hydrogen Hub (MACH2) — Pennsylvania, Delaware, and New Jersey. Award: $750 million. Focused on electrolytic hydrogen for transit, industrial heating, and building decarbonization in the Philadelphia-Wilmington corridor.

The Cancellation: West Coast Hubs Cut in October 2025

The first blow landed on October 24, 2025, when DOE terminated awards to ARCHES and the Pacific Northwest hub — a combined $2.2 billion in funding. The cancellations were part of a broader sweep in which DOE cut $7.56 billion across 223 clean energy projects, affecting programs in 16 states.

Energy Secretary Chris Wright justified the cuts by citing cancellation clauses in the cooperative agreements, arguing that the projects were "not in the interest of the taxpayers." The two cancelled hubs had received only their Phase 1 planning grants — $30 million for ARCHES and an undisclosed smaller amount for PNWH2 — and had not yet begun design or construction work.

Critics immediately noted the geographic pattern. The cancelled hubs were both located in states that voted for Kamala Harris in the 2024 presidential election. California and Washington had been among the most aggressive states in pursuing clean energy mandates and challenging Trump administration environmental policies. Bloomberg NEF analysts observed that the two hubs had "virtually no projects" expected to come online soon, suggesting the cancellations would have minimal near-term impact on hydrogen production capacity. But the signal to the broader clean energy industry was unmistakable.

ARCHES announced it would appeal the cancellation, noting it had secured $10 billion in combined private and public sector commitments beyond the federal award. The Pacific Northwest hub filed a formal appeal with DOE over the loss of its $1 billion grant.

The Court Weighs In: January 2026 Ruling

On January 12, 2026, a federal judge ruled that the Trump administration had acted illegally when it cancelled the $7.56 billion in clean energy grants. The court found that DOE could not unilaterally rescind funding that Congress had appropriated and enacted into law, particularly when the projects had already entered into binding cooperative agreements.

The ruling did not immediately restore funding. Instead, it created a legal framework that the affected hubs and project sponsors could use to challenge the terminations through the administrative appeals process and, if necessary, through further litigation.

For the hydrogen hubs specifically, the court ruling introduced a critical ambiguity: the cooperative agreements contained termination-for-convenience clauses, which DOE cited as its legal authority. But the court's finding that the cancellations were unlawful suggested those clauses could not be invoked for purely political reasons — only for legitimate programmatic or fiscal grounds.

Five Hubs Survive — For Now

By April 2026, the picture had partially clarified. Five of the original seven hubs appeared set to retain their federal funding, though under heightened scrutiny and uncertain timelines.

HyVelocity and ARCH2 — the two hubs most aligned with the current administration's energy priorities, both focused on blue hydrogen from natural gas — were in the strongest position. HyVelocity had received its $22 million Phase 1 award in November 2024 and was proceeding with planning work. ARCH2 benefited from vocal support from Republican Senator Shelley Moore Capito of West Virginia, who championed the hub as an economic lifeline for Appalachian communities transitioning away from coal.

The Heartland Hub received its $20 million Phase 1 award in January 2025 and was proceeding on a 48-month Phase 1 timeline — longer than the other hubs, reflecting the complexity of its multi-state agricultural hydrogen vision.

MachH2 and MACH2 occupied a middle ground. Both were in Phase 1 negotiations as of January 2025, meaning they had been selected but had not yet received Phase 1 funding. Their status depended on whether DOE would proceed with award negotiations that had been initiated under the Biden administration.

But even for the surviving hubs, the situation was fragile. DOE Energy Secretary Ben Dietderich stated in March 2026 that "no determinations have been made other than what has been previously announced," leaving open the possibility that additional cancellations could follow. Industry analysts noted that the administration had been "considering whether to pull funding from all seven hydrogen hubs" — a scenario that would effectively kill the program entirely.

The Broader Industry Fallout

The hub cancellations and uncertainty have rippled through the entire hydrogen value chain.

Plug Power, one of the largest U.S. green hydrogen companies, lost over $75 million in DOE funding across four terminated projects. The company shuffled senior leadership, with incoming CEO Jose Luis Crespo telling investors that Plug Power was still negotiating a separate $1.6 billion DOE loan guarantee — a lifeline that had not yet been finalized and depended on continued DOE support.

Job projections have evaporated. The Clean Air Task Force estimated that cutting hub funding would eliminate over 330,000 expected jobs across the seven hub regions. Even the surviving hubs have slowed hiring and delayed procurement decisions pending funding certainty.

Private capital is retreating. The hydrogen hubs were designed to leverage federal funding to attract multiples of private investment. ARCHES alone claimed $10 billion in private and public commitments anchored by the $1.2 billion federal award. When the federal anchor disappeared, private investors began reassessing their exposure to a sector that now carried significant policy risk.

China is winning by default. China accounts for 65 percent of global green hydrogen electrolyzer capacity and is positioned to dominate hydrogen production through lower technology costs, cheaper renewable electricity, and manufacturing scale that U.S. companies cannot match without federal support. Ninety percent of U.S. hydrogen production by 2030 was already forecast to be blue (natural gas with carbon capture), not green — and the hub cancellations push that ratio even further.

What Grant Seekers Should Learn from the Hydrogen Hub Collapse

The hydrogen hub saga offers hard lessons for any organization that depends on multi-year federal funding.

Lesson 1: Cooperative agreements are not contracts. The termination-for-convenience clauses in DOE cooperative agreements give the government wide latitude to cancel awards. Organizations that treat a federal award as guaranteed funding — rather than as conditional funding that requires ongoing political viability — are taking on risk they may not fully appreciate.

Lesson 2: Phase 1 planning grants do not protect you. Both cancelled hubs had received Phase 1 awards and were actively performing work. The government terminated them anyway. Organizations in early phases of multi-year programs should maintain alternative funding pathways and avoid committing resources that depend entirely on subsequent phases being funded.

Lesson 3: Geography is a variable. The pattern of cancellations — concentrated in states that opposed the current administration — introduces a political dimension that grant seekers in previous eras did not need to consider as explicitly. Organizations in politically competitive or opposition-aligned states may need to emphasize economic impact, job creation, and alignment with stated administration priorities more aggressively in their proposals and stakeholder communications.

Lesson 4: Bipartisan authorization does not guarantee bipartisan execution. The hydrogen hub program was authorized by a law that passed with Republican votes and signed by a Republican-supported infrastructure law concept. That bipartisan origin did not prevent a subsequent administration from cancelling specific awards within the program. Authorization creates the legal framework. Appropriation creates the funding. But execution depends on administrative will — and that can change with an election.

Lesson 5: Legal remedies exist but are slow. The January 2026 court ruling found the cancellations illegal, but it did not immediately restore funding. Organizations pursuing legal challenges to terminated grants should plan for timelines measured in years, not months, and should not count on judicial intervention to restore their programs in time to meet original project milestones.

The hydrogen hub program was supposed to be the foundation of a new American energy industry. Five of the seven hubs may still get built. But the program's troubled trajectory has changed how every infrastructure-scale grant seeker in the country thinks about federal funding risk. For organizations navigating this landscape — whether in hydrogen, clean energy, or any sector that depends on multi-year federal commitments — Granted can help identify which opportunities carry the strongest execution prospects and build proposals that emphasize the resilience factors reviewers are now weighting more heavily.