The Biden administration is in the process of defining what energy sources can be used to make clean energy and still be eligible for valuable tax credits from the Inflation Reduction Act, reported the Wall Street Journal. Various large energy producers have been weighing in on the debate, saying that the subsidies should be widely available to spur the growth of the hydrogen industry.
“The heart of the current conflict is in whether companies planning to use fossil-fuel power from electricity grids to make hydrogen would have to buy equivalent renewable energy on an hourly basis or a looser annual standard,” the Journal reports.
NextEra Energy, BP and Plug Power are some of the companies encouraging the wider availability of the subsidies, arguing that projects should count as green even if they use fossil fuel grid power as long as the company buys renewable energy credits that match their annual usage. Otherwise, the companies argue, hydrogen projects won’t be viable in most of the United States. This would prevent the job and climate benefits that the White House wants.
“If we don’t ever get to having hydrogen available for use, we’ll never solve any problems,” said Emily Fisher, executive vice president at the Edison Electric Institute.
Other companies want stricter rules that require new clean-energy developments and electricity matching based on hourly demand, which would likely deny some competitors the tax credits, said the Journal.
Earlier this month, President Biden announced “$7 billion in federal grants across 16 states for the development of seven regional hydrogen hubs, advancing a key part of a plan to decarbonize the U.S. economy,” Reuters reported.