The US is planning to invest as much as $12.6bn in a programme of works that will turn the state of California into a hydrogen hub.

The project will receive $1.2bn in pump-priming from the Department of Energy (DOE), with the aim of attracting a further $11.4bn in private investment and matching funds from public bodies.

An agreement to this effect was signed last week by the DOE and the Alliance for Renewable Clean Hydrogen Energy Systems (Arches).

Arches is made up of four bodies: the California Governor’s Office of Business and Economic Development; the University of California network; the State Building and Construction Trades Council of California; and the Renewables 100 Policy Institute.

The money will be used to build liquefaction plants and a 266km network of pipes across California, refit the state’s power plants to use hydrogen energy, and replace diesel equipment at the ports of Long Beach, Los Angeles, and Oakland.

Arches said this will create as many as 220,000 “well-paying jobs”.

The plan will begin with an initial tranche of $30m, ramping up to almost $3bn a year.

Arches said money spent would be offset by decreased healthcare costs as air quality in the state improves.

Speaking about the agreement, Senator Alex Padilla commented: “The path to achieving California’s ambitious clean energy goals runs through Arches, and I’m excited to see the California hydrogen hub kick off with this initial round of funding.

“California is leading the nation with the first hydrogen hub to sign a cooperative agreement, and we will continue to lead by decarbonising goods movement, the energy sector and heavy industry.”

The DOE initiative follows a decision last October to make California the first of seven states to become a regional clean hydrogen hub.

California has set the target of becoming carbon neutral by 2045.