Governor Gavin Newsom has responded to the U.S. Department of Energy’s decision to cancel its commitment of up to $1.2 billion in federal funding for California’s Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES) hydrogen hub.
In a statement, Newsom criticized the move, saying: “In Trump’s America, energy policy is set by the highest bidder, economics and common sense be damned. Clean hydrogen deserves to be part of California’s energy future — creating hundreds of thousands of new jobs and saving billions in health costs. We’ll continue to pursue an all-of-the above clean energy strategy that powers our future and cleans the air, no matter what DC tries to dictate.”
The cancellation ends an agreement that had attracted more than $10 billion in cost sharing from mostly private sector partners. According to state officials, this decision puts at risk over 200,000 potential new jobs and undermines a program projected to save nearly $3 billion annually in health-related costs for communities affected by poor air quality.
U.S. Senator Alex Padilla also commented on the development: “The cancellation of ARCHES is vindictive, shortsighted, and proof this Administration is not serious about American energy dominance,” he said. “Walking away from ARCHES threatens the future promise of hydrogen energy and will guarantee energy costs continue to rise for families while the rest of the world surges ahead in its development. California will not back down—we’ll keep leading on clean energy where this Administration has chosen to abandon American leadership.”
Despite the loss of federal support, California officials say they plan to continue collaborating with more than 400 partners involved with ARCHES in efforts to develop a renewable hydrogen ecosystem that can help multiple industries shift from fossil fuels.
California’s climate strategy includes scaling up renewable hydrogen production as outlined in its 2022 Scoping Plan. The plan calls for a significant increase—up to 1700 times current levels—to meet statewide greenhouse gas reduction targets under AB 1279 and achieve carbon neutrality by 2045.
ARCHES was established through partnerships among state agencies such as GO-Biz, academic institutions like the University of California, labor organizations including the State Building and Construction Trades Council, and non-profits such as Renewables 100. The group received over 100 technical proposals totaling more than $56 billion as part of its application process for DOE funding.
The U.S. Department of Energy had selected ARCHES on October 13th, 2023 for negotiations on federal funding support before both parties signed a cooperative agreement—the largest ever for a hydrogen hub—on July 17, 2024.
California continues efforts toward clean energy goals; since 2000 greenhouse gas emissions have dropped by about one-fifth while GDP has grown significantly during that period. In recent years, battery storage capacity has increased sharply—now exceeding 15,000 megawatts—and more than 25,000 megawatts have been added to the electric grid.
The state reports that two-thirds of its electricity came from clean sources in 2023 and it regularly achieves periods powered entirely by clean electricity during parts of most days.
