I 
117TH CONGRESS 
1ST SESSION H. R. 5965 
To direct the Secretary of Energy to establish a pilot program to enter 
into contracts for payment of costs associated with using eligible hydro-
gen, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 12, 2021 
Mr. TONKO (for himself and Mr. MCKINLEY) introduced the following bill; 
which was referred to the Committee on Energy and Commerce 
A BILL 
To direct the Secretary of Energy to establish a pilot pro-
gram to enter into contracts for payment of costs associ-
ated with using eligible hydrogen, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Clean Hydrogen De-
ployment Act of 2021’’. 
SEC. 2. CLEAN HYDROGEN CONTRACT FOR DIFFERENCES 
PILOT PROGRAM. 
(a) ESTABLISHMENT OF PILOT PROGRAM.—The Sec-
retary, acting through the Assistant Secretary of the Of-
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fice of Fossil Energy and Carbon Management and in con-
sultation with the Assistant Secretary of the Office of En-
ergy Efficiency and Renewable Energy and other relevant 
offices within the Department of Energy, shall establish 
a pilot program to enter into contracts, on a competitive 
basis, with entities for payment of costs associated with 
the production or purchase of eligible hydrogen that is 
used in projects carried out by such entities. 
(b) SELECTION.— 
(1) IN GENERAL.—Not later than 2 years after 
the date of enactment of this Act, the Secretary 
shall enter into at least 5 contracts under the pilot 
program established under subsection (a), with each 
contract term for a period of no longer than 5 years. 
(2) APPLICATIONS.—In selecting entities to 
enter into contracts with under the pilot program es-
tablished under subsection (a), the Secretary shall 
ensure— 
(A) at least 1 entity selected will carry out 
a project that uses eligible hydrogen as a feed-
stock in an industrial application, such as syn-
thesis of ammonia, fuels, or chemicals; 
(B) at least 1 entity selected will carry out 
a project that uses eligible hydrogen as a fuel 
in an industrial application; 
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(C) at least 1 entity selected will carry out 
a project that uses eligible hydrogen as a fuel 
in a transportation application, including use at 
a transportation hub, such as a port, transit 
depot, or distribution center; 
(D) at least 1 entity selected will carry out 
a project that uses eligible hydrogen as a fuel 
in a power application; 
(E) not less than 2 entities selected will 
carry out a project that uses eligible hydrogen 
produced using electricity, or thermal energy, 
generated from zero-emission energy sources; 
and 
(F) each entity selected addresses any nec-
essary hydrogen storage and infrastructure 
needs associated with the project, including by 
procuring those services from other entities. 
(c) CONTRACT FOR DIFFERENCES.— 
(1) PAYMENT.—The Secretary shall provide at 
least one payment annually to an entity with which 
the Secretary has entered into a contract under the 
pilot program established under subsection (a). 
(2) AMOUNT.—Except as otherwise provided in 
this subsection, the amount of a payment, with re-
spect to eligible hydrogen used by a project over a 
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to produce or purchase an equal quan-
tity of conventional hydrogen; multi-
plied by 
(ii) the number that is equal to— 
(I) 1; minus 
(II) as determined by the Sec-
retary, the number that is equal to— 
(aa) the quantity of the 
greenhouse gas emissions, on a 
life-cycle basis, associated with 
such eligible hydrogen that is 
used by the project; divided by 
(bb) the quantity of green-
house gas emissions, on a life- 
cycle basis, associated with an 
equal quantity of conventional 
hydrogen. 
(3) ALTERNATIVE
AMOUNT
CALCULATION.— 
With respect to an entity with which the Secretary 
has entered into a contract under the pilot program 
established under subsection (a) that will carry out 
a project that uses eligible hydrogen to displace a 
nonhydrogen fuel or feedstock, the Secretary may 
determine and apply a formula that is different than 
the otherwise applicable formula under paragraph 
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(2) for calculating payments to such entity, taking 
into consideration the differences between the eligi-
ble hydrogen to be used in the project and the non-
hydrogen fuel or feedstock being displaced with re-
spect to— 
(A) cost; 
(B) emissions; and 
(C) heating value, as applicable. 
(4) ADDITIONAL PAYMENT.—To the extent ap-
propriations are available, and notwithstanding sub-
section (d), the Secretary may provide a payment to 
an entity with which the Secretary has entered into 
a contract under the pilot program established under 
subsection (a) at the beginning of such contract— 
(A) that is additional to any other payment 
under this subsection; 
(B) that is not more than 50 percent of 
the expected total payments for the first year of 
the contract; and 
(C) for capital expenditures or procure-
ment of services related to the project carried 
out by such entity, including equipment and in-
frastructure for storage, delivery, and distribu-
tion of eligible hydrogen. 
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(5) APPLICABLE FAIR MARKET VALUE.—Before 
entering into a contract with an entity under the 
pilot program established under subsection (a), the 
Secretary shall communicate to such entity the ex-
pected dollar amount of, and method for calculating, 
the applicable fair market value of conventional hy-
drogen or a relevant displaced fuel that will apply 
for the duration of such contract for the purposes of 
this subsection. 
(d) MAXIMUM PAYMENT PER YEAR.— 
(1) IN GENERAL.—The amount of payments to 
an entity under a contract entered into under this 
section (other than a payment described in sub-
section (c)(4)) shall not exceed $50,000,000 per 
year. 
(2) PAYMENT
ADJUSTMENT.—Subject to the 
availability of appropriations, the Secretary may in-
crease the maximum amount of payments described 
in paragraph (1) to an entity to up to $100,000,000 
per year, as determined appropriate by the Sec-
retary. 
(e) APPLICATIONS.—To be eligible to enter into a 
contract under this section, an entity shall submit an ap-
plication to the Secretary that includes— 
(1) a description of the applicable project; 
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(2) the location of any facility included in the 
project; 
(3) the method of production, including ex-
pected feedstocks, and expected cost, of eligible hy-
drogen to be used in the project; 
(4) a description of any infrastructure and 
equipment investments, including modification, con-
version, and retooling, that will be done to support 
increased use of eligible hydrogen at any facility of 
the project; 
(5) an estimate of annualized expected green-
house gas emissions associated with the production 
of the eligible hydrogen expected to be used in the 
project, calculated using methods and procedures de-
termined appropriate by the Secretary; and 
(6) any additional information determined to be 
appropriate by the Secretary. 
(f) PRIORITY.—In selecting entities to enter into con-
tracts with under this section, the Secretary shall give pri-
ority to an entity based on— 
(1) with respect to the project to be carried out 
by such entity using eligible hydrogen, the extent to 
which such project would— 
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(A) use hydrogen as a fuel or feedstock as 
a portion of total fuels or feedstocks used at the 
facility; 
(B) use eligible hydrogen as a portion of 
total hydrogen used at the facility; 
(C) support or encourage future use, com-
mercialization, or cost reduction of eligible hy-
drogen and associated infrastructure, including 
development of centralized hubs for hydrogen 
production, distribution, delivery, and storage 
and use of existing infrastructure; 
(D) reduce greenhouse gas emissions; 
(E) seek to mitigate emissions of nitrogen 
oxides from the production and use of eligible 
hydrogen; and 
(F) seek to source fuels and feedstocks 
used in the production of eligible hydrogen that 
are associated with fewer greenhouse gas emis-
sions; and 
(2) the extent to which such entity commits to 
making or contracting for additional investments to 
support the production, distribution, delivery, stor-
age, and use of eligible hydrogen, including modi-
fying, installing, and constructing equipment and in-
frastructure. 
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(g) ASSURANCES.—Before entering into a contract 
under this section with an entity that will produce or pur-
chase, and then use eligible hydrogen produced from fossil 
fuels where carbon capture technologies are used during 
the production of such eligible hydrogen, the Secretary 
shall secure a written assurance from such entity that 
such entity shall seek to ensure— 
(1) the reduction of upstream fugitive green-
house gas emissions associated with any feedstock 
used in the production of such eligible hydrogen; and 
(2) with respect to the carbon dioxide captured 
from the production of such eligible hydrogen, the 
long-term storage or utilization, if such utilization 
results in long-term storage, of such captured carbon 
dioxide, where such captured carbon dioxide is 
stored in a manner that the Secretary determines is 
consistent with existing relevant regulations for long- 
term storage of carbon dioxide and is otherwise ap-
propriate. 
(h) REPORT TO CONGRESS.—Not later than 1 year 
after all funding made available for the pilot program es-
tablished under subsection (a) is expended, the Secretary 
shall submit to Congress and make available to the public 
a report that describes— 
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(1) any challenges or benefits that entities 
under such pilot program reported with respect to 
the integration or use of eligible hydrogen; 
(2) an assessment of the national market poten-
tial for eligible hydrogen; 
(3) an assessment of barriers and opportunities 
for widespread use of eligible hydrogen; 
(4) recommendations for how future Federal, 
State, and local programs can best support the 
adoption and widespread use of eligible hydrogen; 
and 
(5) any other data and analysis the Secretary 
determines to be necessary to describe the imple-
mentation, outcomes, or effectiveness of such pilot 
program. 
(i) DEFINITIONS.—In this Act: 
(1) CONVENTIONAL
HYDROGEN.—The term 
‘‘conventional hydrogen’’ means hydrogen produced 
from steam methane reforming of nonrenewable 
feedstocks, such as natural gas, where carbon cap-
ture technology is not used during such production. 
(2) ELIGIBLE HYDROGEN.—The term ‘‘eligible 
hydrogen’’— 
(A) means hydrogen, the production of 
which releases at least 80 percent less green-
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house gas emissions into the atmosphere per 
kilogram of hydrogen as compared to the pro-
duction of conventional hydrogen, as deter-
mined by the Secretary taking into consider-
ation greenhouse gas emissions released from— 
(i) the applicable hydrogen production 
facility; 
(ii) the production of electricity con-
sumed in the applicable hydrogen produc-
tion process; 
(iii) conventional hydrogen production 
facilities; and 
(iv) the production of electricity con-
sumed in conventional hydrogen production 
processes; and 
(B) includes hydrogen produced using elec-
tricity, or thermal energy, generated from zero- 
emission energy sources. 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Energy. 
(j) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this Act— 
(1) $375,000,000 for fiscal year 2022; and 
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(2) $250,000,000 for each of fiscal years 2023 
through 2026. 
Æ 
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