Proposal of a Clean Water Credit for the American Hydrogen Industry: Implications for the Industrial Hybrid Power Generation and Consumption of Renewable Resources

Chuck Schmitt, president of SSAB Americas — a supplier of steel plates— said the proposal “supports SSAB’s leadership and innovation in the decarbonization of the steel industry. This clarifying language will help drive new technology investment and create clean energy jobs in the United States.”

If the guidance is too restrictive, there will be little or no growth in the industry and a failed opportunity to take advantage of the IRA.

With the time it takes to bring new renewable resources online, there is an industry that is stopped and unable to have more of it.

The Fuel Cell & Hydrogen Energy Association includes more than 100 members involved in production, distribution, and use of hydrogen, including vehicle manufacturers, industrial gas companies, renewable developers and nuclear plant operators. Frank Wolak, the association’s president, said it’s important the industry be given time to meet any provisions that are required for the top tier of the credit.

The American Petroleum Institute said in a statement that “hydrogen of all types” is needed and urged the administration to foster more flexibility for hydrogen expansion, not less.

The USChamber of Commerce’s senior vice president for policy says that the guidance will stunt the growth of a critical industry before it has even begun and his organization plans to advocate during the public comment process for the flexibility needed to kick start investment.

Rachel Fakhry, policy director for emerging technologies at the Natural Resources Defense Council called the proposal “a win for the climate, U.S. consumers, and the budding U.S. hydrogen industry.” The proposal from the Clean Air Task Force was an excellent step toward developing a clean hydrogen market in the United States.

Many grassroots groups still have concerns about a growing hydrogen industry and the impact it could have on the environment. They do not want methane to be used to make hydrogen and do not trust carbon capture technologies that can prevent CO2 emissions from escaping into the environment. Hydrogen production hogging limited wind and solar resources is a possibility when using renewable energy. If grids are forced to use fossil fuel generators more as backup power sources, that could lead to higher greenhouse gas emissions. You don’t really know if the energy you use is clean or dirty when an electric lyzer plugs into the grid.

Administration officials estimate the hydrogen production credits will deliver $140 billion in revenue and 700,000 jobs by 2030 — and will help the U.S. produce 50 million metric tons of hydrogen by 2050.

Most hydrogen today is not made this way and does contribute to climate change because it is made from natural gas. About 10 million metric tons of hydrogen is produced in the United States each year.

The Energy Impact of the Tax Credit for Hybrid Hydrogen Production in the U.S. and the Environmental Impact on Clean Energy Trade and Industry

The deputy secretary of energy says the proposal is equivalent to the amount of energy used by every plane, train and bus in the US.

The U.S credit for hydrogen production is the most generous in the world, according to a professor researching the US’s climate law.

The public will have 60 days to submit comments once the new hydrogen guideline are posted to the Federal Register, which the Treasury and Department and IRS will have to take into account before finalizing new rules.

The guidelines elicited strong reactions from the industry and clean energy advocates. Some experts think new measures need to be taken to make sure that the Biden administration’s push for a domestic hydrogen supply chain doesn’t increase pollution. Meanwhile, clean energy trade groups argued that the tax credit is now too restrictive to allow clean hydrogen production to flourish.

The Biden administration needs to find other ways to encourage more clean energy to come online rather than targeting hydrogen production in particular, she adds. When the government is incentivized, it does not require that new power generation be built to support a vehicle, Bekemohammadi said.

The three requirements reflect recommendations from a Princeton-led study published earlier this year. Tech companies such as Microsoft and the like have goals of their own for buying local renewable electricity and matching their purchases on an hourly basis in a bid to encourage clean energy growth.