Michigan recently secured a significant victory for President Joe Biden and his green energy agenda in hydrogen extraction, which could ultimately boost Democrats' chances in the battleground state's elections in 2024.
In May, a major Norwegian hydrogen manufacturer chose the Great Lake State as the site of a nearly $500 million factory that will have the equipment necessary to allow hydrogen to be extracted from water. The selection of Michigan, as opposed to a European site, is a major win for Biden because he pledged that his administration would overtake Europe when it comes to green energy production.
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The ability to deliver on a key campaign promise may give Democrats an edge heading into the 2024 election, particularly in Michigan, where Sen. Debbie Stabenow's (D-MI) seat is up for reelection. While already leaning Democratic, the economic headwinds could push the seat solidly into the hands of the Democrats.
Michigan is also aiming to become one of four hydrogen development hubs in the United States. If the Department of Energy awards it this designation, it will make the state eligible for more federal grants.
Gov. Gretchen Whitmer (D-MI) and several other Democrats have worked to achieve clean energy in the state. At the beginning of the year, Whitmer met with Norwegian officials at the Ministry of Petroleum to discuss clean energy innovation, including hydrogen fuel cells and green energy technologies.
"Hydrogen is one of the fuels for the future,” Rep. Debbie Dingell (D-MI) said in an interview with Politico. “We want to locate all kinds of different alternative technologies here.”
The arrival of Nel, the Norwegian company, in Michigan will shift 500 new jobs from Europe to the U.S., another victory for Biden as he touts low unemployment levels and works to combat high inflation.
It also sets Michigan on a course to host one of the largest factories in the world, which would give Whitmer and Michigan Democrats another victory in their pocket that can appeal to voters heading into a tense election cycle next year.
Nel CEO Hakon Volldal told Politico there is "not one single driver" behind the company's decision to set up shop in Michigan. He pointed to several factors, including the benefits of Biden's CHIPS and Science Act, which provides funding for technology development, and Michigan's green technology grants.
“If you take the IRA and the CHIPS Act together, we’re talking about more than $400 billion,” Volldal said. “On top of that, you have subsidies for renewable power and so on. Europe is dwarfed by the numbers we see in the U.S.”
The U.S. has drawn the eye of several European firms due to a provision from the Inflation Reduction Act, the major climate and healthcare law passed by Democrats last year, that allows for tax credits, a senior European Commission official told Politico.
The U.S. also has a smoother process for receiving subsidies compared to Europe, the official said. In the U.S., "they just have to meet certain requirements. That’s attractive for industry.”
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The Biden administration has focused heavily on green energy and climate policies, particularly in the area of fossil fuels. In May, the Department of Agriculture announced billions in new grants to expand renewable energy installations across the rural U.S.
The funding came from the Inflation Reduction Act and represents the Biden administration's priorities of decarbonizing the electric sector and slowing climate change, administration officials said.