An assessment of the emissions generated throughout the life cycle will determine how many incentives an industry can access. Up to $3/kg of tax credits for those who use only clean energy. Also the fossils will be incentivized with the lower share provided by the plan, equal to 60 cents/kg
Groups for Clean Hydrogen incentives defined
– Three dollars a kilo for that produced from clean energy, down to 60 cents/kg for that based on fossil fuels. The expected plan of incentives to clean hydrogen, in the form of fiscal credit, of the Biden administration sees the light. The measure was presented on 22 December and is part of the Inflation Reduction Act (IRA), the massive legislative package by which the United States finances and directs their energy transition.
Biden’s plan for clean hydrogen
The system developed by the White House includes a series of blocks depending on the energy source used to produce hydrogen. The most substantial incentives are reserved for the use of photovoltaic and wind, but from the plan there is also a hand stretched to the industry that intends to produce blue and gray H2, ie from fossil sources.
The assessment uses emissions generated over the entire hydrogen life cycle as the main metric. To better quantify the emissions related to the electricity consumption of electrolyzers, the incentive plan for clean hydrogen requires industries to have energy certificates.
According to White House estimates, tax credits for hydrogen production will generate $140 billion in revenue and 700,000 new jobs by the end of the decade. Overall, the plan should guarantee production of 50 million tonnes per year by 2050. According to the IEA’s 1.5 μ C energy transition scenario, global production of hydrogen from clean sources must reach 50 million tonnes by 2030, while hydrogen from fossil sources with CO2 recovery must reach 22 million tonnes.
The plan still lacks clear indications on the possibility of using nuclear energy for the production of clean hydrogen. In the next 2 months, the Biden administration will start a comparison with the national industry of the atom to find the square on the criteria to be adopted to not completely put out of play the sector from the hydrogen race. Trying, at the same time, not to relax too much on the criteria creating loopholes for the excessive use of electricity generated by fossil fuels.
