Please ensure Javascript is enabled for purposes of website accessibility
Hydrogen Tax Credit Plan Unveiled as Biden Administration Tries to Jump Start Industry
gvw_ap_news
By Associated Press
Published 4 months ago on
December 22, 2023

Share

WASHINGTON — The Biden administration released its highly anticipated proposal for doling out billions of dollars in tax credits to hydrogen producers Friday, in a massive effort to build out an industry that some hope can be a cleaner alternative to fossil fueled power.

The U.S. credit is the most generous in the world for hydrogen production, Jesse Jenkins, a professor at Princeton University who has analyzed the U.S. climate law, said last week.

The Proposal

The proposal — which is part of Democrats’ Inflation Reduction Act passed last year — outlines a tiered system to determine which hydrogen producers get the most credits, with cleaner energy projects receiving more, and smaller, but still meaningful credits going to those that use fossil fuel to produce hydrogen.

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.

“That’s equivalent to the amount of energy currently used by every bus, every plane, every train and every ship in the US combined,” Energy Deputy Secretary David M. Turk said on a Thursday call with reporters to preview the proposal.

Reality Check

That may be a useful metric for comparison, but it’s a long way from reality. Buses, planes, trains and ships run on liquid fuels for which a delivery infrastructure exists, and no such system exists to deliver cleanly-made hydrogen to the places where it could most help address climate change. Those include steel, cement and plastics factories.

Hydrogen is being developed around the world as an energy source for sectors of the economy like that which emit massive greenhouse gases, yet are difficult to electrify, such as long-haul transportation and industrial manufacturing. It can be made by splitting water with solar, wind, nuclear or geothermal electricity yielding little if any planet-warming greenhouse gases.

Current Hydrogen Production

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 currently produced in the United States each year, primarily for petroleum refining and ammonia production.

The Administration’s Proposal

As part of the administration’s proposal, firms that produce cleaner hydrogen and meet prevailing wage and registered apprenticeship requirements stand to qualify for a large incentive at $3 per kilogram of hydrogen. Firms that produce hydrogen using fossil fuels get less.

The credit ranges from $.60 to $3 per kilo, depending on whole lifecycle emissions.

Contentious Issues

One contentious issue in the proposal was how to deal with the fact that clean, electrolyzer hydrogen draws tremendous amounts of electricity. Few want that to mean that more coal or natural gas-fired power plants run extra hours. The guidance addresses this by calling for producers to document their electricity usage through “energy attribute certificates” — which will help determine the credits they qualify for.

Reactions to the Proposal

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 Clean Air Task Force likewise called the proposal “an excellent step toward developing a credible clean hydrogen market in the United States.”

But Marty Durbin, the U.S. Chamber of Commerce’s senior vice president for policy, said the guidance released today “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 kickstart investment, create jobs and economic growth, and meet our decarbonization goals.”

He accused the White House of failing to listen to its own experts at the Department of Energy.

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 Fuel Cell & Hydrogen Energy Association includes more than 100 members involved in hydrogen production, distribution and use, 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.

“What we can’t have is is an industry that is stalled because we have imposed requirements that the marketplace is not ready to fulfill,” Wolak said, particularly with the time it takes to bring new renewable resources online.

If the guidance is too restrictive, he said, “you’ll see a much smaller, if not negligible growth in this industry and a failed opportunity to capitalize on the IRA.”

Other industry representatives welcomed the proposal.

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.”

 

RELATED TOPICS:

DON'T MISS

Sacramento Gave Homeless Camp a Lease as an Experiment. Here’s What Happened.

DON'T MISS

Merced Supervisors Accused of ‘Triple Crown Race’ of Failures Amid Talk of Closing Fire Stations

DON'T MISS

Teacher Appreciation Week Surprises That Educators Will Love

DON'T MISS

A Mission of Mercy, Then a Fatal Strike: How an Aid Convoy in Gaza Became Israel’s Target

DON'T MISS

Walberg Era Begins With a Charge to ‘Revolutionize’ Bulldogs Basketball

DON'T MISS

California Man Sentenced to 40 Years to Life for Fatal Freeway Shooting of 6-Year-Old Boy

DON'T MISS

16 Clovis Students Rewarded With Scholarships for Their Resilience

DON'T MISS

Dr. Green Thumb’s Is Open. Sweet Flower Debuts Saturday in Fresno Cannabis Rollout.

DON'T MISS

Reacher Star Alan Ritchson Calls Donald Trump a ‘Rapist’

DON'T MISS

Community Leaders Call for Transparency in Fresno Superintendent Search

UP NEXT

Making Cement Is Very Damaging for the Climate. One Solution Is Opening in California

UP NEXT

Buyer Resistance Grows as EV Ownership Rises: Poll

UP NEXT

Court Upholds CA’s Authority to Set Nation-Leading Vehicle Emission Rules

UP NEXT

New EPA Rule Says 218 US Chemical Plants Must Reduce Toxic Emissions That Are Likely to Cause Cancer

UP NEXT

US Wildfires Are Getting Bigger and More Complex, Prompting Changes in Firefighting Workforce

UP NEXT

Austin Tells Congress Israel Is Taking Steps to Boost Aid to Gaza as Lawmakers Question US Support

UP NEXT

Will China Flood the Globe With EVs, Green Tech? Latest on US-China Trade Fight

UP NEXT

JPMorgan’s Dimon Warns Inflation, Political Polarization, Wars Creating Risks Not Seen Since WWII

UP NEXT

Are Crickets the New Kale? How Edible Insects Might Just Save the Planet

UP NEXT

CA Labor Priorities and Business ‘Job Killers’ on a Collision Course

A Mission of Mercy, Then a Fatal Strike: How an Aid Convoy in Gaza Became Israel’s Target

4 hours ago

Walberg Era Begins With a Charge to ‘Revolutionize’ Bulldogs Basketball

15 hours ago

California Man Sentenced to 40 Years to Life for Fatal Freeway Shooting of 6-Year-Old Boy

16 hours ago

16 Clovis Students Rewarded With Scholarships for Their Resilience

17 hours ago

Dr. Green Thumb’s Is Open. Sweet Flower Debuts Saturday in Fresno Cannabis Rollout.

18 hours ago

Reacher Star Alan Ritchson Calls Donald Trump a ‘Rapist’

18 hours ago

Community Leaders Call for Transparency in Fresno Superintendent Search

19 hours ago

Israeli Settlers Rampage Through a West Bank Village, Killing 1 Palestinian and Wounding 25

21 hours ago

US Intelligence Finding Shows China Surging Equipment Sales to Russia to Help War Effort in Ukraine

21 hours ago

From Tragedy to Triumph: The Land Before Time Litter’s Journey

22 hours ago

Sacramento Gave Homeless Camp a Lease as an Experiment. Here’s What Happened.

When Sacramento changed its plan to demolish a homeless encampment on a vacant lot on Colfax Street, instead offering the homeless occupants...

2 hours ago

2 hours ago

Sacramento Gave Homeless Camp a Lease as an Experiment. Here’s What Happened.

3 hours ago

Merced Supervisors Accused of ‘Triple Crown Race’ of Failures Amid Talk of Closing Fire Stations

3 hours ago

Teacher Appreciation Week Surprises That Educators Will Love

4 hours ago

A Mission of Mercy, Then a Fatal Strike: How an Aid Convoy in Gaza Became Israel’s Target

15 hours ago

Walberg Era Begins With a Charge to ‘Revolutionize’ Bulldogs Basketball

16 hours ago

California Man Sentenced to 40 Years to Life for Fatal Freeway Shooting of 6-Year-Old Boy

17 hours ago

16 Clovis Students Rewarded With Scholarships for Their Resilience

18 hours ago

Dr. Green Thumb’s Is Open. Sweet Flower Debuts Saturday in Fresno Cannabis Rollout.

MENU

CONNECT WITH US

Search

Send this to a friend