HIFIA: A Bi-Partisan Bill to Build Out Hydrogen Transport Infrastructure

March 9, 2023

Reading Time : 4 min

On March 2, 2023, a bi-partisan group of Senators introduced a package of legislation dubbed the Hydrogen Infrastructure Initiative aimed at facilitating the build out of the hydrogen infrastructure necessary to transport, store and deliver hydrogen. The Hydrogen Infrastructure Initiative includes four separate pieces of legislation: (i) the Hydrogen for Ports Act (S.647), (ii) the Hydrogen for Industry Act (S.646), (iii) the Hydrogen for Trucks Act (S.648) and (iv) the Hydrogen Infrastructure Finance and Innovation Act (HIFIA) (S.649). While all four bills could play an important role in assisting the development of hydrogen infrastructure in the U.S., HIFIA is likely to be of outsize importance given its focus on addressing one of the most significant barriers to the widespread deployment of clean hydrogen: the ability to cost-effectively transport it from where it is produced to where it will be consumed. Senators Chris Coons (D-DE) and John Cornyn (R-TX) are the initiative’s original co-sponsors.

Hydrogen has a potentially large role to play in decarbonizing numerous sectors of the economy. But unlocking hydrogen’s potential may require it to be transported long distances via pipeline, long considered the most cost effective transportation method. At present, there are roughly 1,600 miles of hydrogen pipelines in the U.S., most of which are concentrated along the Gulf Coast.

If the clean hydrogen economy is truly going to scale up in the next decade to the extent many predict, the U.S. will need to build out many more miles of hydrogen pipelines or convert existing pipelines to carry hydrogen. HIFIA, if passed, would represent a promising first step towards resolving regulatory uncertainties and assisting with financing these energy transition projects. It is modeled off of WIFIA (for water infrastructure), TIFIA (for transit infrastructure) and the recently enacted CIFIA (for carbon transport infrastructure), and is comprised of the following four elements:

1) HIFIA Pilot Program

The bulk of HIFIA is devoted to establishing a pilot program pursuant to which the Department of Energy (DOE) would provide grants, long-term low-cost supplemental loans or technical assistance to hydrogen transport, storage or delivery projects, including new hydrogen pipelines, retrofitted natural gas pipelines that can transport at least a blend of hydrogen and natural gas and rail projects.  In selecting projects to receive HIFIA grants or loans, DOE would be required to identify projects that, to the extent practicable, are large capacity, common carrier infrastructure, aid in creating hydrogen economies of scale, and, among other things, generate the greatest benefit to low-income or disadvantaged communities. DOE would be required to coordinate the HIFIA Pilot Program, to the maximum extent practicable, with the Infrastructure Investment and Jobs Act’s $8 billion hydrogen hub program.

2) Broadening Title XVII Innovative Clean Energy Loan Guarantee Program

HIFIA would make clean hydrogen projects eligible to receive a DOE loan guarantee under Title XVII’s Innovative Clean Energy Loan Guarantee Program. Under Title XVII, which is administered by DOE’s Loan Programs Office (LPO), commercial scale, first-of-a-kind projects that reduce greenhouse gas emissions and are defined as “eligible projects” are able to receive DOE-backed loan guarantees. Although Title XVII currently includes “[h]ydrogen fuel cell technology for residential, industrial, or transportation applications” in its definition of eligible projects, HIFIA would substantially broaden Title XVII to include any “[h]ydrogen technologies applicable to 1 or more end-use sectors, such as power generation, transportation, aviation, storage, industrial, and chemicals, including hydrogen fuel.” Given that LPO now has in excess of $60 billion in loan authority under Title XVII to utilize, HIFIA’s expansion of the definition of eligible projects could be a significant boost to hydrogen projects, including hydrogen transport infrastructure. If the program is implemented like CIFIA, we expect the DOE to distribute the funds as low cost loans instead of grants.  Applicants will need to be aware of the terms of the loans and particular DOE-specific requirements.

3) Required Regulatory Assessment

HIFIA would require the Federal Energy Regulatory Commission (FERC), Surface Transportation Board (STB) and Pipeline and Hazardous Materials Safety Administration (PHMSA), in coordination with DOE, to perform an assessment of their collective jurisdiction over the siting, construction, safety and regulation of hydrogen transportation infrastructure, including the blending of hydrogen in natural gas pipelines. If the required assessment disclosed that additional authority was needed by the above agencies to support the deployment of hydrogen transport infrastructure, they would be required to submit a report to Congress within 270 days of HIFIA’s enactment identifying what additional authority they required. The agencies would also be responsible for identifying HIFIA pilot projects’ eligibility to recover their costs under FERC or STB regulated rates. HIFIA’s required regulatory assessment could help to resolve areas of considerable uncertainty regarding the regulation of hydrogen pipelines.

4) Hydrogen Pipeline Corridors Study

HIFIA requires DOE, the Environmental Protection Agency and the Council on Environmental Quality, along with other relevant agencies, to conduct a study assessing the potential layout of hydrogen pipeline corridors. The agencies would also be required to consider other aspects of building out hydrogen infrastructure such as costs, the ability to site pipelines within existing linear infrastructure corridors, the impact of hydrogen leakage, a framework for monitoring and reporting hydrogen leakage and the reduction in carbon intensity based on blending various amounts of hydrogen into natural gas. 

The Akin Energy team will be tracking HIFIA and other legislative and regulatory developments related to hydrogen transport infrastructure. While there is not sufficient political will to immediately pass these proposals, these bills are likely to come up for debate as Congress works towards reforming federal permitting across energy projects.

Share This Insight

Previous Entries

Speaking Energy

January 30, 2025

The oil & gas industry is experiencing a capital resurgence, driven by stabilizing interest rates and renewed attention from institutional investors. Private equity is leading the charge with private credit filling the void in traditional energy finance and hybrid capital instruments gaining in popularity. Family offices are also playing a crucial role, providing long-term, flexible investments.

...

Read More

Speaking Energy

January 23, 2025

Under a second Trump presidency, the U.S. is expected to consider reversal of many of the Biden administration’s climate and environmental policies, in addition to a markedly different approach to trade policy and oil & gas regulation. This includes expanding oil & gas development on public lands and offshore, lifting the pause on liquified natural gas (LNG) exports to non-Free Trade Agreement countries and repealing the methane fee.

...

Read More

Speaking Energy

January 15, 2025

We are pleased to share a recording of Akin’s recently presented webinar, “Drilling Down: What Oil & Gas Companies Can Expect from Federal Agencies During Trump’s Second Administration.”

...

Read More

Speaking Energy

January 9, 2025

On January 6, 2025, the Federal Energy Regulatory Commission (FERC) issued a Final Rule to amend its regulations governing the maximum civil monetary penalties assessable for violations of statutes, rules and orders within FERC’s jurisdiction. The Final Rule is a result of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which requires each federal agency to issue an annual inflation adjustment by January 15 for each civil monetary penalty provided by law within the agency’s jurisdiction. The adjustments in the Final Rule represent an increase of approximately 2.6% for each covered maximum penalty. FERC’s adjusted maximum penalty amounts, which will apply at the time of assessment of a civil penalty regardless of the date on which the violation occurred, are set forth here and will become effective upon publication in the Federal Register.

...

Read More

Speaking Energy

January 9, 2025

Join projects & energy transition partners Ike Emehelu and Shariff Barakat as well as climate change partner Ken Markowitz at Infocast's Projects & Money, where Ike will moderate the "The State of Project Finance – View from the C-Suite" panel, and Shariff will moderate the "Capital Markets & Other Capital Sources for Project Finance & Investment" panel. Ken will moderate the “Carbon Markets Forecast for 2025” panel.

...

Read More

Speaking Energy

January 8, 2025

On December 16, 2024, the Federal Energy Regulatory Commission (FERC or the Commission) issued an Order to Show Cause and Notice of Proposed Penalty proposing to assess staggering civil penalties against American Efficient, LLC and its affiliates (collectively, American Efficient) in connection with an alleged scheme to manipulate the capacity markets operated by PJM Interconnection, L.L.C. (PJM) and the Midcontinent Independent System Operator, Inc. (MISO).1 The Order directs American Efficient to show cause as to why it should not be required to pay a civil penalty of $722 million and disgorge $253 million.2

...

Read More

Speaking Energy

December 5, 2024

On November 27, 2024, the Federal Energy Regulatory Commission issued Venture Global CP2 LNG, LLC, an order that sets aside, in part, the Commission’s prior authorization of the CP2 LNG Terminal and CP Express Pipeline Project (collectively, the CP2 Project) under sections 3 and 7 of the Natural Gas Act (NGA). 

...

Read More

Speaking Energy

December 5, 2024

On November 27, 2024, in Venture Global, CP2 LNG, LLC,1 the Federal Energy Regulatory Commission’s (FERC or Commission) explicitly overruled precedent set in Northern Natural Gas Co.,2 a 2021 decision in which FERC made an affirmative finding that an interstate natural gas pipeline project it was certificating under section 7 of the Natural Gas Act (NGA) would not make a “significant” contribution to global climate change. Northern Natural is the only FERC decision in which a so-called significance determination was made with respect to greenhouse gas emissions (GHG) arising from a FERC-regulated natural gas infrastructure project. In Venture Global, FERC rejected arguments that it needed to follow Northern Natural and assess the significance of GHG emissions in all NGA certificate proceedings to comply with the National Environmental Policy Act (NEPA). NEPA requires federal agencies, including FERC, that perform “major federal actions,” which include issuing NGA section 7 certificates, to prepare an environmental impact statement (EIS) if the action will “significantly affect[] the quality of the human environment.”3 FERC has been under pressure to fully explain why it has chosen not to apply Northern Natural’s significance analysis in subsequent cases, and that issue is currently before FERC on remand from the U.S. Court of Appeals for the District of Columbia (D.C. Circuit) in Healthy Gulf et al. v. FERC, which reviewed FERC’s approval of a liquefied natural gas (LNG) terminal under NGA section 3.

...

Read More

© 2025 Akin Gump Strauss Hauer & Feld LLP. All rights reserved. Attorney advertising. This document is distributed for informational use only; it does not constitute legal advice and should not be used as such. Prior results do not guarantee a similar outcome. Akin is the practicing name of Akin Gump LLP, a New York limited liability partnership authorized and regulated by the Solicitors Regulation Authority under number 267321. A list of the partners is available for inspection at Eighth Floor, Ten Bishops Square, London E1 6EG. For more information about Akin Gump LLP, Akin Gump Strauss Hauer & Feld LLP and other associated entities under which the Akin Gump network operates worldwide, please see our Legal Notices page.