Zero emissions transportation-centered Nikola Corp. is partnering with Keystate Natural Gas Synthesis LLC to bring what may be Pennsylvania’s first blue hydrogen and chemicals production facility. 

KeyState’s planned 7,000-acre production facility is to feature commercial-scale carbon capture and storage (CCS) for a blue hydrogen, ammonia and urea production facility. Nikola and KeyState are in the works on a definitive agreement to expand the hydrogen supply for Nikola’s heavy-duty fuel cell electric vehicles (FCEV).

“Nikola’s participation in the project will allow us to secure sufficient volumes of hydrogen to underpin and accelerate the adoption of zero-emission trucks by unlocking new customer demand and enabling key investments in downstream hydrogen refueling infrastructure in the Mid-Atlantic region,” said Nikola President Carey Mendes.

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According to Nikola, KeyState may supply the Phoenix-based clean transportation company with up to 100 metric tons (mt) daily of blue hydrogen. This has the potential to fuel about 2,500 Nikola Tre FCEVs, displacing more than 51 million gallons/year of diesel fuel based on U.S. Department of Energy (DOE) estimates.

“This will be key to our supply strategy and will help develop our refueling network at scale. Additionally, the low-carbon, clean hydrogen will allow us to maximize value under the Inflation Reduction Act and future downstream fuel and dispensing incentive programs,” Mendes added. 

The Inflation Reduction Act, signed into law earlier this year by President Biden, allocated $3 billion through 2028 to fund developments in “advanced technology vehicles” that emit little to no greenhouse gas emissions. In addition, the act earmarked an additional $2 billion through 2031 for the production of hybrid, plug-in electric hybrid, electric vehicles and FCEVs. 

Nikola and KeyState also noted their intention to support an application as a principal project under DOE’s $8 billion Regional Clean Hydrogen Hub funding program established in 2021 under the Infrastructure Investment and Jobs Act. 

What’s more, Nikola and KeyState said they are working to develop a liquefaction solution to support a hydrogen distribution project from KeyState to Nikola’s planned refueling center currently under development. 

KeyState Natural Gas Synthesis is a joint venture (JV) with Keystate LLC acting as project developer and Frontier Natural Resources Inc. providing natural gas and geological storage. The Oil and Gas Climate Initiative Climate Investments, a CEO-led oil and gas consortium, has also partnered on the JV.  

KeyState estimates it could produce up to 30 million kilograms/year of zero-emissions transportation fuel, aka KeyState H2Blue. This potentially could avert up to 320,000 mt annually of carbon dioxide and 27 million gallons of diesel fuel, according to the JV. 

Including the diesel exhaust treatment that KeyState also plans to produce from its urea and ammonia, the project could displace up to nine billion gallons of diesel, according to KeyState. 

The team is working to bring the Clinton County, PA-based site online around 2026 with the intent of advancing the transition to lower emissions in transportation, chemicals and manufacturing, according to Nikola. It is projected that the facility could separate about as much as 99% of carbon from the hydrogen during the methane autothermal reforming process, which would be sent to onsite CCS.