Posted on 12/22/2023 9:27:53 AM PST by Red Badger
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 US credit is the most generous in the world for hydrogen production, Jesse Jenkins, a professor at Princeton University who has analyzed the US climate law, said last week.
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 help the US 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.
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 the climate crisis. Those include steel, cement, and plastics factories.
Hydrogen is being developed around the world as an energy source for sectors of the economy that 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.
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.
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.
Some types of hydrogen production still uses fossil fuels right now 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.
Rachel Fakhry, policy director for emerging technologies at the Natural Resources Defense Council called the proposal “a win for the climate, US consumers, and the budding US hydrogen industry.”
But Marty Durbin, the US 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 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 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.”
A 60-day comment period on the proposal now begins.
Energy Secretary Jennifer M. Granholm said the proposal “will further unprecedented investments in a new, American-led industry as we aim to lead and propel the global clean energy transition.”
Some of the money will flow to regional networks, or “hubs,” of hydrogen producers, consumers and infrastructure that the Biden administration is also trying to kickstart with a $7 billion program. This fall, officials selected clean-energy projects from Pennsylvania to California for the program.
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Meet the new scam, same as the old scam.
Sounds like somebody is leaving their drugs laying around in the White House again.
Except since Methane is mostly hydrogen, a case can be made for gas producers to get in on the ‘gig’.
Does ANYBODY ever go back to check these prognostications?
“700,000 jobs by 2030” — I’d wager you will get 700 jobs by 2030 and they will all be in demolition of failed projects.
That is a lot of ‘walkin’ around money’ for the reptiles the torture us with our own tax dollars.
Now, politicians have figured out how to tax that.
And water does have some percentage of hydrogen.
So I get credit for collecting rainwater?
We’re saved...Now...where are all those hydrogen stations and how will the hydrogen get there...and will my car catch on fire in the garage??
Where in the Constitution does it give the Executive branch power/authority to give tax credits?
The byproduct of Reneformer H2 production from NatGas is CO2.
Run it thru a PSA unit and its cheap, but I don’t want it sitting in my garage.
That’s a euphemism for wasting energy.
What we want is cheap, plentiful, reliable, safe energy. We should not be looking to subsidize something that needs to be at least competitive with existing energy sources. And boasting about the number of jobs created is really telling us that it will have high labor costs.
Correct in a round about way. Hydrogen is a clean fuel period. Where we run into a problem is it is created out of water. Hydrogen is cheap to produce and generators are relatively simple to build. There a multitude of problems with this scenario. No profit to be made unless there is handouts. Hydrogen is highly volatile and people are stupid, enough said. Now how to meter it for combustion is the challenge that has never really been harnessed. It has been successfully done on a limited basis for fixed speed engines but not for a range like automotive application where you have stop and go traffic. For these reasons it is the next great Rona scam to make the rich richer and the people poorer.
BETCHA BIDEN IS NOT ALIVE BY 2030.
“ Where we run into a problem is it is created out of water.”
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And when it is combusted to produce power for a car the “waste product” is water. Having grown up mostly in very cold climates I have to wonder whether much of that waste water will end up as very thin but very slippery black ice on the roads travelled in cold climates.
It could well be the GOOD OLD CURSE of UNINTENDED CONSEQUENCES.
The sum of dollars is too large, the mission of the dollars is too large, the timeline is unrealistic and the whole thing will generate too much corruption and too many failures. But Biden et el don’t care because it will generate millions in campaign donations back to the Dims from the crony capitalist ventures involved.
As for the federal government and hydrogen as fuel, there is room for very basic research to try to prove out various routes to that end. We have federal research enttities that can do that for many, many, many times less than $140 billion.
After than no special tax deductions will be needed for smart venture capitalists to start companies that what to get into the hydogen-as-fuel marketplace.
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