Hydrogen and Renewable Fuels

Hydrogen (H2) is the lightest and most common element in the universe. It can store and carry energy, but it’s rarely found on its own naturally, so it must be separated from other materials like water or natural gas.

Hydrogen can be used as a gas or a super-cooled liquid. It requires special equipment and infrastructure to transport, store, and use safely. Once produced, hydrogen can generate electricity in fuel cells or turbines. It can also be used in industrial processes and refining to make products such as fertilizers and other renewable fuels.

For decades, most hydrogen has been made using natural gas or through a process called steam-methane reforming. Because this process relies on fossil fuels, it produces significant carbon emissions.

Electrolysis is a technology that has proven to be commercially effective, and regional water and energy demand impacts, along with byproducts of hydrogen use, are still evolving and becoming more efficient.

Hydrogen is considered a renewable fuel when it’s produced using renewable resources both as the source for the hydrogen and the source for the energy input into the production process.

Beyond renewable hydrogen, there are a variety of other fuels produced from renewable resources. This includes biodiesels made from waste animal fats or vegetable oils, bioethanol made from corn or sugar, and biogas and renewable natural gas (RNG) converted from biomethane captured from municipal waste processing systems. Depending on its chemical properties and energy density, a renewable fuel can be used to power special equipment and processes or used as a fossil-fuel replacement.

Washington law defines two categories of clean or green hydrogen based on how the hydrogen is produced.

Green electrolytic hydrogen

Green electrolytic hydrogen is produced through electrolysis, the separation of water into hydrogen and oxygen with electricity.

“Green electrolytic hydrogen” is defined in RCW 43.330.560 as “hydrogen produced through electrolysis and does not include hydrogen manufactured using steam reforming or any other conversion technology that produces hydrogen from a fossil fuel feedstock.” Under this definition, water is the feedstock, or raw material, for the hydrogen, and electricity is the process energy used in electrolysis.

Hydrogen produced through electrolysis meets this definition regardless of whether the electricity is produced from onsite renewable sources, fossil-fired generation, unspecified grid sources, or any combination of these resources.

Washington established the green electrolytic hydrogen definition in 2022 to encourage hydrogen production facilities even if they will not rely exclusively on renewable electricity sources in the near term.

The Clean Energy Transformation Act (Chapter 19.405 RCW) requires all electricity used in Washington to be greenhouse gas-neutral by 2030 and 100% clean by 2045. Under the 2030 GHG-neutral standard, a utility may use fossil-fired electricity for up to 20% of its supply under an alternative compliance mechanism.

Renewable hydrogen in Washington

“Renewable hydrogen” is defined in RCW 54.04.190 and RCW 19.405.020 as hydrogen produced using renewable resources both as the source for the hydrogen and the source for the energy input into the production process. In the context of renewable hydrogen inputs, “renewable resource” means:

• Water
• Wind
• Solar energy
• Geothermal energy
• Renewable natural gas
• Wave, ocean, or tidal power
• Biodiesel fuel that is not derived from crops raised on land cleared from old growth or first growth forests
• Biomass energy

The actual carbon intensity (CI) for green electrolytic hydrogen and other low-or zero-carbon hydrogen depends on the sources of electricity used by each production facility and other aspects of the production process used.

In recent years, the Washington Legislature passed a number of laws designed to accelerate the production and use of green electrolytic hydrogen and other renewable fuels:

• RCW 43.330.565 (Chapter 292, Laws of 2022) establishes the Office of Hydrogen and Renewable Fuels at Commerce. The office works with stakeholders and advises on funding and projects related to renewable and green electrolytic hydrogen and other renewable fuels.
• RCW 80.50.020 (Chapter 183, Laws of 2022) addresses siting of hydrogen manufacturing projects.
• RCW 82.89.010 (Chapter 185, Laws of 2022) provides incentives for green electrolytic and renewable hydrogen manufacturing and storage projects, supports clean energy manufacturing projects, and incentivizes the use of labor and community benefit tools such as apprenticeship standards and Community Workforce Agreements.
• RCW 54.04.190 authorizes public utilities to produce and sell green electrolytic and renewable hydrogen, biofuels, and other renewable fuels.
• HB 1216 updates several state laws to improve siting and permitting for clean energy projects. The law also directed the development of a Programmatic Environmental Impact Statement (PEIS) for green electrolytic and renewable hydrogen projects.
• SB 5447 (Laws of 2023) updates a collection of RCWs to promote the alternative jet fuel industry, including creating a tax credit RCW 82.04.4361 – for alternative jet fuel manufacture (production and blending) and use tax credits and a preferential business and occupation tax rate.
• RCW 81.104.240 authorizes public transit agencies to produce, sell and use green electrolytic and renewable hydrogen.

This legislation is part of a broader policy landscape that makes Washington a compelling place to produce and use green hydrogen and renewable fuels. Earlier legislation that paved the way includes:

• Clean Energy Transformation Act (CETA)
• Net-zero GHG emission limits by 2050 (Tracking greenhouse gases)
• Climate Commitment Act

Complimentary policies include:

• Department of Ecology’s early planning process that supports permitting clean energy projects
• Governor Ferguson’s new Joint Clean Energy Acceleration team led by Commerce (Accelerating and Supporting Clean Energy Projects)
• Ecology’s Programmatic EIS
• Clean Fuel Standard
• Healthy Environment for All (HEAL) Act

Commerce has awarded grants to a variety of hydrogen and renewable fuel projects across the state to accelerate decarbonization, stimulate private investments in energy communities, and support the advancement of a new clean fuel economy in the state. The following projects have received funding through Commerce:

• In 2019, Commerce awarded a grant of $1.5 million to OCOchem for electro-fuels production and green portable energy generators for shipping container refrigeration at the Port of Tacoma. See related article.
• In 2021, Commerce awarded a grant of $2.95 million to Klickitat County Public Hospital District No.1 for a hydrogen fuel cell emergency back-up generator as part of the Klickitat Valley Smart Grid microgrid.
• In 2023, Commerce awarded a grant of $2.75 million to Douglas County Public Utility District 1 for the installation of hydrogen fueling equipment for East Wenatchee’s green electrolytic hydrogen production facility.
• In 2025, Commerce awarded a grant of $1.95 million to Lewis County Transit for the completion of construction of a renewable hydrogen fueling station in Chehalis.