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2023 Minnesota Renewable Energy Roundtable Highlights Rural and Ag Opportunities in Hydrogen Economy

Using hydrogen as a source of clean energy is central to decarbonizing many fossil fuel-dependent industries and a pathway to a healthier, cleaner planet. Transitioning to this hydrogen economy is also a potential once-in-a-lifetime opportunity for Minnesota’s rural communities and agricultural producers.

The Agricultural Utilization Research Institute (AURI) hosted its annual Minnesota Renewable Energy Roundtable in Sauk Rapids, Minnesota late last year to discuss the current landscape of the hydrogen economy and the work being done in agriculture, power, transportation, and other sectors to catalyze and innovate here in Minnesota.

Researchers, scientists, academics, business leaders, and government officials gathered for the daylong conference to share ideas, discuss strategy and network with the common goal of establishing Minnesota as a leader in knowledge and use of renewable energy.

“There is a lot of interest and energy in this space. The next question is, what can we do and how can we help move this forward?” says Shannon Schlecht, AURI’s executive director. “Minnesota is already a leader in ethanol, so why can’t we lead in green hydrogen as well?”

Pete Wyckoff is the assistant commissioner of federal and state energy initiatives for the Minnesota Department of Commerce. He discussed recent federal and state laws that are accelerating the advancement and adoption of clean hydrogen as the world works toward achieving the goal of net zero emissions by 2050.

The recently passed Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) are game changers in the energy sector, according to Wykoff. Transitioning to cleaner power generation and transportation is also intertwined with rural economic development. The IRA for example is the largest climate action law ever passed anywhere “and it is not even close,” Wykoff says. The law includes 135 different programs and billions of dollars in federal grants, loans and tax credits to support hydrogen in areas like fertilizer, green steel, and as a power source. There are innumerable ways for Minnesota’s businesses to take advantage of the different tax credit incentives in the advancement of hydrogen.

He detailed a scenario for an individual who starts a business producing green energy from renewable sources like wind or solar energy. The business then turns that energy into hydrogen and stores the hydrogen before ultimately turning it into sustainable aviation fuel (SAF). That business has the potential to collect more than five different tax credits throughout the process.

“There is a lot of federal support for growing the green economy in Minnesota,” Wykoff says. “There are also questions to answer about what we want that economy to look like. Environmental justice needs to be front and center in that discussion as we wrestle with and solve those issues.”

The discussion then shifted to how Minnesota stands to benefit from continued developments in green hydrogen. Scientists and climate researchers agree that industrial decarbonization on a large scale requires progress in four categories: renewables, geologic storage, access to raw materials and existing infrastructure for end use.

According to research conducted by Dr. Jennifer King, a research engineer at the National Renewable Energy Laboratory, Minnesota has the building blocks in place in each of the four essential categories to quickly emerge as a national leader in this space. She shared research she conducted that argues Minnesota can be the top state in the country for green hydrogen production by 2035 with the right course of action. The state is ideally located for clean industrial applications and has access to low-cost renewable energy sources. The geologic storage and existing infrastructure are in place. More progress can be made through co-locating hydrogen production with an end use, like steel.

“Transporting and storing hydrogen is very costly so if you can use hydrogen where it is produced you can start to see the costs come down quickly. Co-locating is how Minnesota is going to become very cost-competitive,” King says.

One of the most exciting developments in the evolution of the hydrogen economy is already underway. The federal government created a network of regional hydrogen hubs. Minnesota is part of the so-called “Heartland Hub” along with North Dakota, South Dakota, Wisconsin, and Montana. The U.S. Department of Energy has committed up to $925 million to the Heartland Hub for projects that are expected to reduce carbon emissions by roughly 1 million metric tons per year, or the equivalent of 220,000 gasoline-powered cars. Xcel Energy is a leading member of the Heartland Hub. In a proposal to the U.S. Department of Energy, leaders of the Heartland Hub laid out plans to produce hydrogen for use in fertilizer, power, and heating.

Mike Jensen, director, Clean Fuels PMO for Xcel Energy, says his company sees hydrogen not only as a tool to provide clean energy for Xcel Energy’s customers but also to decarbonize high greenhouse gas-producing industries like steel, fertilizer, and aviation fuel.

“Hydrogen as a substitute for natural gas is so versatile and it has great potential. We are going to be using hydrogen in a lot of different ways in the next several years and we are going to keep pushing forward,” says Jensen. Another area for rapid advancement in the use of hydrogen is as a clean fuel. Dr. William Northrop, a professor of mechanical engineering at the University of Minnesota, says there is huge e-fuel potential for Minnesota-made biofuels that would further reduce CO2 emissions. Advancements are happening very rapidly in that work.

Several innovative companies from around the world working on green hydrogen-related innovations presented at the 2023 Minnesota Renewable Energy Roundtable. Tomoyuki Koide, from the Tsubame BHB in Japan, talked about how his company is working to develop small-scale production of green ammonia with a goal of “manufacturing ammonia at a low temperature, low pressure, and a small scale, so it will be possible to provide ammonia efficiently and at low cost.” He pointed out that all of the ammonia in Minnesota was produced outside the state. On-site production of ammonia minimizes storage needs, shrinks the supply chain, and decarbonizes the industry.

Karen Baert, the CEO and co-founder of Ammobia, discussed her San Francisco-based company’s process for clean ammonia production for use in fertilizer and as an energy carrier. Ammonia is the second-most produced chemical in the world with a $200 billion market. There are only 400 production plants around the world, however. She added that hyper-centralization leads to market volatility, higher prices, increased transportation costs, and security risks.

“Farmers in the Midwest are paying way too much for grey ammonia,” Baert says.

Through Ammobia’s process for production, ammonia can be produced using renewable fuels in a decentralized network of facilities across the globe. Cleaner, cheaper ammonia would significantly expand the market and have the potential to reduce up to five percent of global greenhouse gas emissions.

Mauricio Medici, the licensing and business development manager for Stamicarbon, discussed his company’s efforts to design, license, and develop urea plants for the fertilizer industry that reduce emissions. Ammonia is a key player in decarbonizing the food value chain both as a fertilizer and as an energy source for transportation.

Nathalie Beken, an investment associate at Azimuth Capital Management, stated their firm invests in low-carbon fuel projects and is actively seeking companies to partner with that produce low-carbon hydrogen, ammonia, and sustainable aviation fuels. She said there is excitement among investors in the emerging areas of green hydrogen and ammonia that will spur future investment.

Inder Singh, CEO and founder of SBI of Edmonton, Alberta, presented a process for converting ethanol into hydrogen. This process, which SBI has already successfully demonstrated at the pilot level, could allow ethanol to be used as a hydrogen carrier to supply the emerging market for hydrogen in heavy-duty vehicles powered by fuel cells.

Mark Ritter, grant administrator at GEVO Inc., discussed what his company is doing in the sustainable aviation fuel space and its Farm to Flight program to provide incentives to farmers to grow low-carbon intensity corn through a grant from the United States Department of Agriculture.

The 2023 Minnesota Renewable Energy Roundtable was sponsored by Compeer Financial, Avisen Boutique Business Law, Great River Energy, CenterPoint Energy, Xcel Energy, the Minnesota Department of Agriculture, and Great Plains Institute.