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KeyState’s Clean Hydrogen and Carbon Storage Project Secures Funding through the Appalachian Regional Clean Hydrogen Hub (ARCH2) $925 Million Federal Grant

  • KeyState Natural Gas Synthesis to receive substantial funding from US Department of Energy ARCH2 grant to advance the clean hydrogen economy.
  • KeyState Natural Gas Synthesis is developing a Clean Hydrogen and Carbon Storage Complex in Pennsylvania, with a focus on emissions reduction and clean hydrogen production.
  • The Complex aims to create over 1,000 jobs during construction, reduce emissions, and position Pennsylvania as a global hydrogen industry leader.

Pennsylvania, US, October 31, 2023 – the US Department of Energy made a significant announcement, selecting the Appalachian Regional Clean Hydrogen Hub (ARCH2) as one of seven regional hubs to receive federal grants totaling $7 billion for the advancement of the clean hydrogen economy. ARCH2 was granted $925 million.

KeyState Natural Gas Synthesis (“Keystate”), a portfolio company of specialist decarbonization investor, Climate Investment, serves as a Principal Project of ARCH2 and is a recipient of these grants. In response to this transformational development, Perry Babb, President of KeyState Energy, and the project’s developer, stated, “With this announcement, KeyState will receive substantial grant funding over the coming years to undergird the much larger private sector investment required to develop KeyState’s Clean Hydrogen and Carbon Storage Complex in North Central Pennsylvania.”

KeyState’s pioneering approach encompasses on-site natural gas extraction, methane conversion into hydrogen and carbon, and the underground storage of CO2, powered by zero-carbon sources. This innovative process enables large-scale, high-quality hydrogen production that meets the most stringent requirements for Qualified Clean Hydrogen under the Federal Hydrogen Production Tax Credit.

The produced clean hydrogen will be directed toward serving the hydrogen fuel cell heavy truck market and supporting the production of ammonia and urea for diverse industries, including agriculture, medicine, and transportation.

KeyState’s project is poised to capture and store over 500,000 tons of CO2 annually while concurrently contributing to historic emissions reduction and job creation in the Appalachian region.

During the construction phase, KeyState is expected to generate more than 1,000 jobs, and its impact will extend to workforce development initiatives across numerous school districts, vocational schools, and two- and four-year colleges. This economic influence will be felt across a multicounty region spanning Clinton, Clearfield, Cameron, and Centre counties.

Pennsylvania, with its history of energy transitions spanning over 300 years, is well-prepared to lead the global hydrogen sector. The state’s abundant reserves of low-cost natural gas, substantial geological storage potential, and a legacy of energy innovation position Pennsylvania and Appalachia as emerging global hydrogen leaders for the next 30 years.

About KeyState Natural Gas Synthesis

KeyState Natural Gas Synthesis is a joint endeavor between KeyState Energy (Project Developer) and Frontier Natural Resources Inc. (Natural Gas & Geological Storage) in partnership with Climate Investment. KeyState will produce low-carbon hydrogen, automotive-grade urea (DEF), and ammonia from natural gas while integrating carbon capture and storage in a closed carbon loop in northern Pennsylvania. KeyState will create hundreds of construction and long-term, high-value jobs, hundreds of millions of dollars of annual local economic activity, and spur a new industry for rural Appalachia. (

About Climate Investment

Climate Investment is an independently managed specialist investor focused on accelerating capital-efficient decarbonization of heavy-emitting sectors. Operational since 2017, its team of investment and technical experts has built a portfolio of over 35 outstanding technology and business model innovations. Collectively, its portfolio delivered 57 MT CO2e of cumulative greenhouse gas reduction in the period 2019-2022. Climate Investment was founded by member companies of the Oil & Gas Climate Initiative (“OGCI”). They have invested in Climate Investment funds and deployed many of its portfolio innovations, supporting their early commercial development.  Visit