SACRAMENTO, Calif. (AP) — California will be the first state to receive federal funds under a program to create regional networks, or “hubs,” that produce hydrogen as an energy source for vehicles, manufacturing and generating electricity, officials announced Wednesday.

The U.S. Department of Energy said the California Hydrogen Hub will receive an initial $30 million to begin its planning and design phase. The state will eventually receive up to $1.2 billion for the project that is a key part of the Biden administration’s agenda to slow climate change.

The administration in October selected seven regional hubs for the $7 billion program that will kickstart development and production of hydrogen fuel, with the goal of eventually replacing fossil fuels such as coal and oil with the colorless, odorless gas that already powers some cars and trains.

The hubs, which include projects in 16 states, will spur more than $40 billion in private investment and create tens of thousands of good-paying jobs, many of them union positions, President Joe Biden has said.

The president has called clean hydrogen essential to his vision of net-zero greenhouse gas emissions in the U.S. by 2050.

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The projects will be based in California, Washington, Minnesota, Texas, Pennsylvania, West Virginia and Illinois. All but the California and Texas hubs include projects in multiple states. Pennsylvania has projects in two separate hubs.

Frank Wolak, president and CEO of the Fuel Cell & Hydrogen Energy Association, said Wednesday’s announcement is monumental because the Energy Department got through a rigorous competitive process to be at the point now where there are contracts and it’s able to fund the hubs.

The money will fund a major infrastructure program and invest in the future of clean energy, he added.

“It’s the beginning of really showing what the hubs are going to be doing,” he said Wednesday. “They’re all unique. In the case of California, they’re undertaking projects for using hydrogen for the decarbonization of the hard-to-abate sectors in transportation, among other things. Transportation is a big portion of what they’re going to tackle.”

A hub is meant to be a network of companies that produce clean hydrogen and of the industries that use it — heavy transportation, for example — and infrastructure such as pipelines and refueling stations.

Hydrogen can be made in ways that yield little if any planet-warming greenhouse gases. The Energy Department says hydrogen, once produced, can generate power in a fuel cell, emitting only water vapor and warm air.

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