The Appalachian Hydrogen Hub (ARCH2) was always a questionable prospect. Since 2021, the Ohio River Valley Institute has asserted that carbon capture and blue hydrogen, the technologies underpinning what later became the hub, are prohibitively expensive and only possible if ratepayers and taxpayers foot the bill.
This is why just four months after being allocated $7 billion, ARCH2 and the other designated hydrogen hubs called on the Department of Treasury to loosen restrictions for accessing the 45V clean hydrogen production tax credit. In other words, years before any projects would break ground, all seven of the federally funded hydrogen hubs were already asking for more money. Even the hub’s supporters admit that these technologies are uneconomic for most target applications without additional public support.
Now, the pattern of project cancellations and partner exits we’ve seen emerge over the last two and a half years is starting to look like an existential threat to the hub. With CNX suspending its ARCH2 project, we’re watching the first major domino fall. This is a turning point for the hub – a moment when we need to ask: How much more do our public leaders need to see before they start questioning these misguided investments?
The hub has always been a distraction from proven, more effective, and cheaper decarbonization pathways. In 2022, there was no time to waste on false climate solutions; there is even less now. Organizations across Appalachia have been fighting for decades to chart new visions for our shared future. It’s time for our leaders to catch up and begin putting serious political and economic weight behind the policies and investments that will actually benefit our communities.
CNX’s Suspension: The Latest and Largest Crack in ARCH2
Earlier this month, the Pittsburgh Business Times reported that CNX is hitting “pause” on its ARCH2 project in Southern West Virginia, citing an “onerous” federal environment. This development came as no surprise given the long-awaited final rules released by the Department of Treasury in January. CNX, Pennsylvania Governor Josh Shapiro, and other political allies had lobbied Treasury to support CNX’s plans to produce hydrogen from coal mine methane. Thankfully, federal officials refused, maintaining the tax credit’s original purpose of supporting truly clean hydrogen and preventing CNX and other companies from profiting from wasteful coal mining practices.
The importance of this scheme to CNX’s bottom line was made clear in the following weeks when CNX’s stock price plummeted more than 20%. Unsurprisingly, the fallout from the tax credit rules dominated the company’s latest earnings call. However, as significant as this development is, it’s only the latest sign the entire hydrogen hub is in jeopardy.
The Myth of ARCH2’s Viability
CNX’s suspension isn’t an isolated event; it’s part of a longer pattern that underscores the fundamental nature of the Appalachian hydrogen hub. Since ARCH2 was first announced in 2023, four project development partners have exited the hub and five of the original 15 projects have been scrapped. Many remaining project partners are financially struggling or lack experience managing industrial-scale facilities. And now, CNX, one of likely three companies responsible for most of the hub’s planned hydrogen production, has suspended its plans. While the hub’s backers maintain that shifts in the hub’s plans are to be expected, at some point, these disruptions have to be seen as proof that the hub concept itself is inherently unstable and not viable. It’s difficult to draw any other conclusion from these disruptions, especially since several developers cited insufficient public funding as the reason for their decisions.
Despite this disarray, the political and economic conversation around ARCH2 remains wildly out of sync with reality. Billions of dollars in public and private investment have been allocated to a project that simply doesn’t have the economic or technological foundation to succeed and public officials are still set on throwing more public dollars at the problem. Meanwhile, viable, community-focused solutions — cleaner, more sustainable industries that could generate long-term economic benefits — are being overlooked.
The Opportunity Cost of Bad Investments
The continued political and economic support for ARCH2 isn’t just misguided; it’s actively harming the region. Every dollar spent propping up an unviable hydrogen hub is a dollar not spent on real solutions—renewable energy, energy efficiency, sustainable manufacturing, and job programs that could create lasting prosperity without the environmental and economic risks that come with fossil fuel-based hydrogen.
The communities of Appalachia have long been treated as sacrifice zones for extractive industries, from coal to fracking and now hydrogen. The ARCH2 hub was pitched as a lifeline, but it’s proving to be another industry-driven illusion, prioritizing corporate profits over real economic development.
Time for a Reality Check
How much more do we need to see before our leaders acknowledge that ARCH2 represents a failed past and not a vision of the future? When will we see political will shift toward investments that actually serve the region and its people?
The cracks in ARCH2 are becoming impossible to ignore. CNX’s exit is just the beginning. It’s time for our elected officials and policymakers to stop doubling down on bad bets and start championing real solutions that create sustainable jobs and a healthier environment. The people of Appalachia deserve better.
The moment for a reality check is now.