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$1.2 Billion on the Line: California’s top-ranked energy project faces Trump budget axe

Jacob Shelton April 8, 2025

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Sacramento, California – A bipartisan coalition of California lawmakers is urging the Trump administration not to cut $1.2 billion in federal funding for the state’s premier hydrogen energy project, warning that such a move could derail efforts to transition from fossil fuels and jeopardize thousands of jobs.

The appeal comes amid reports that the Department of Energy is preparing to defund nearly 300 clean energy projects nationwide—including four of seven “hydrogen hubs” created under the Biden administration. California’s ARCHES hub (Alliance for Renewable Clean Hydrogen Energy Systems) is among those reportedly on the chopping block, despite being the highest-rated applicant for the $7 billion hydrogen initiative.

In a letter sent Monday to Energy Secretary Chris Wright, 47 of California’s 52 congressional representatives—including four Republicans—called on the department to maintain funding for ARCHES, describing it as a “strategic investment in American energy innovation.” Senators Alex Padilla and Adam Schiff also signed the letter.

“ARCHES plays a critical role in securing American energy dominance, advancing world-leading technology, and lowering energy costs for American families,” the lawmakers wrote.

ARCHES was awarded $1.2 billion in federal funds and has pledged to bring in $11.2 billion more from private investment. The initiative aims to reduce carbon emissions by powering hard-to-decarbonize industries like steel manufacturing and port operations using hydrogen—a clean-burning fuel that emits only water vapor.

The potential funding cut has raised concerns over political bias. A draft list circulating in Congress and reviewed by The Times suggests that 80% of the projects facing defunding are located in states that voted against Trump in the 2024 election, including California, Oregon, Washington, and parts of the Midwest. Meanwhile, hubs in red states such as Texas, Appalachia, and the Upper Midwest appear to be safe.

California lawmakers emphasized that ARCHES projects are planned across the state—including at the Ports of Long Beach, Los Angeles, and Oakland—and are expected to create 220,000 jobs.

“This bipartisan support underscores how important ARCHES is not just to California, but to our national energy future,” said Rep. George Whitesides (D-Agua Dulce), who led the effort. “Cutting this funding would not only undermine our climate goals but cost Americans good-paying jobs.”

The Department of Energy has declined to confirm the project list, calling it a draft and cautioning against reliance on “fake lists.”

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