Oil Majors/Utilities Push Tax Credits For H Generated From Any Power Source, "Carbon Capture"
The promise of a powerful new fuel that can be used to run such things as steel mills or heavy construction equipment without any greenhouse gas emissions was a major selling point in the climate package President Biden signed over the summer. But now, as tens of billions of taxpayer dollars are poised to start flowing toward “green hydrogen” technology, environmentalists, scientists and some clean tech firms fear the subsidies could boost a fuel with a very different profile.
They are fighting an intense lobbying effort by some of the world’s biggest energy firms to make those lucrative tax credits from the Inflation Reduction Act available even to companies that are using fossil fuels to produce the hydrogen, releasing what some scholars warn could be an enormous amount of greenhouse gas in the process. The dispute underscores the considerable challenges involved with implementing the Inflation Reduction Act, which included hundreds of billions of dollars to speed the transition toward a greener economy. Several of the provisions are geared toward accelerating production of next-generation clean technologies. But deep disagreements exist over how quickly some of them can be brought into the mainstream and how aggressively the federal government should demand quick climate benefits.
Tensions are also emerging around subsidies for capturing and storing carbon, as well as those for next-generation nuclear power plants and development of sustainable aviation fuels. The corporate resistance to requiring all green hydrogen be made with clean energy has alarmed major environmental groups and several developers of the new fuel. They warn the less restrictive rules sought by industry groups representing companies such as BP, NextEra and ExxonMobil from the IRS threaten to undermine the integrity of the fledgling green hydrogen industry and the new climate law. “We are talking about a massive subsidy, where more than $100 billion could be spent,” said Rachel Fakhry, who leads hydrogen work at the Natural Resources Defense Council. “We could wind up with government spending it on something that actually increases emissions. Imagine the consequences of tons of added emissions heavily subsidized by a climate bill. That is an awful story.”
EDIT
At the core of the dispute is the question of whether the lucrative hydrogen subsidies should be conditioned on the fuel being produced entirely with renewable power, confirmed by hourly tracking of the electrons flowing from the grid to the projects. The companies arguing for less strict requirements say flexibility in how production is powered is essential to nourishing the fragile industry, which needs to get up and running quickly to produce the most climate benefits.
EDIT
https://www.washingtonpost.com/business/2023/03/03/green-hydrogen-inflation-reduction-act/
