Oil majors and utilities seek tax credits for projects powered in part by fossil fuels
Energy companies have launched a lobbying blitz in Washington over pending rules they say will make or break the case for tens of billions of dollars’ worth of investment in hydrogen fuel. The Financial Times reports on this.
The production of green hydrogen — achieved by splitting water molecules with clean electricity — received generous subsidies in last year’s landmark US climate law. The Treasury department next month is due to issue tax guidelines that determine which types of hydrogen projects will qualify. renewable energy.
But with renewable energy still supplying only a fraction of the nation’s power grid, companies are pushing for an approach that allows for some hydrogen made from electricity generated by fossil fuels.
The debate comes down to how hydrogen makers prove the power they buy is “clean”. The Treasure’s most stringent proposal involves certifying that every hour of hydrogen production is powered by a zero-carbon energy source, essentially requiring its use around the clock.
Industry lobbyists say this would force hydrogen plants to shut down when clean electricity is not available. Instead, they want the Treasury to use an “annual matching” system that allows producers to purchase credits for renewable electricity in amounts equal to their yearly energy consumption.
Such a scheme would make investment in US hydrogen more attractive, they say, enabling companies to effectively store up green power generated at times of surplus — for example when the midday sun passes over solar farms — for use later.
