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Climate

AM Briefing: Hydrogen Tax Credit Rules Finally Unveiled

On the controversial subsidies, battery production, and India's extreme weather

AM Briefing: Hydrogen Tax Credit Rules Finally Unveiled
Heatmap Illustration/Getty Images

Current conditions: Temperatures are about 30 degrees higher in the Plains and Midwest than what’s seasonally normal • Northern Vietnam is enduring a severe cold spell • High winds from Storm Pia helped the U.K. set a new record for wind energy generation in just 30 minutes.

THE TOP FIVE

1. Biden unveils long-awaited hydrogen tax credit rules

The Biden administration today unveiled strict rules governing the tax credits for clean hydrogen production, reports Heatmap’s Robinson Meyer. Hydrogen produces no climate pollution when burned, and could potentially replace fossil fuels in many sectors if scaled up responsibly. Under the Inflation Reduction Act, a company can get up to $3 for each kilogram of hydrogen made with clean electricity that it produces and sells. But to qualify for the subsidy, would-be hydrogen producers will have to demonstrate that they used clean, zero-carbon electricity to power their electrolyzers, the energy-hungry machines that pull hydrogen out of water or other molecules. Defining clean electricity has proven to be an enormous challenge and the subject of one of the biggest fights around the law. Under the new rules, electricity used to produce hydrogen must:

  • come from a relatively new source of zero-carbon power
  • be produced at roughly the same time that it is used to make hydrogen
  • have been made on the same power grid that the electrolyzer itself is using

Some industry groups allege the new rules could stunt the field in its infancy. Deputy Secretary of the Treasury Wally Adeyemo was effusive about the new rules’ benefits. “We’ve developed a structure that will drive innovation and create good-paying jobs in this emerging industry while strengthening our energy security and reducing emissions in hard-to-transition sectors of the economy,” he told reporters.

2. Analysis shows U.S. battery production is on track to meet demand

New analysis from the Environmental Defense Fund, provided exclusively to Heatmap, suggests that U.S. battery production is going really well. The data shows American battery manufacturers around the country — many of them automakers — have announced over 1,000 gigawatt hours of U.S. battery production that’s slated to come online by 2028, far outpacing projected demand.

EDF

As Heatmap’s Neel Dhanesha explains, this matters because the Inflation Reduction Act stipulates that, in order to be eligible for tax credits, electric vehicle components can’t be made by a country on the U.S.’s “foreign entities of concern” list. That rules out batteries made in China. Without an increase in American battery manufacturing, we run the risk of Americans being either unwilling or unable to pay for the EVs that we’d need to hit strict new EPA vehicle emissions standards.

3. 7,000 car dealers join portal for quick EV tax credit payments

Let’s stick with EVs for a moment: The U.S. Treasury today announced that more than 7,000 car dealers have registered with the IRS Energy Credits Online portal. Many electric vehicles are eligible for sizable federal tax credits, and this portal, unveiled last month, helps streamline the crediting process by allowing dealers to apply the credit as a kind of discount at the point of sale. If the dealer is registered on the portal, they can submit the sales information to the IRS and receive payment for the value of the credits within 72 hours.

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  • 4. India wants to use AI in weather forecasting

    India is testing ways of incorporating artificial intelligence into weather forecasting to better prepare for extreme weather events, Reuters reports. The India Meteorological Department already uses supercomputers for weather models but “an AI model doesn't require the high cost involved in running a supercomputer,” Saurabh Rathore, an assistant professor at Indian Institute of Technology-Delhi, says. “You can even run it out of a good quality desktop.” The Centre for Science and Environment estimates that India saw almost one weather disaster per day this year, and that these events, exacerbated by global warming, have killed nearly 3,000 people. The U.K.’s Met Office is also exploring AI models that could forecast extreme weather events.

    Centre for Science and Environment

    5. Indonesia to fine some palm oil producers

    Indonesia will start fining companies that own palm oil plantations in areas designated as forests. Palm oil is widely used in foods, cosmetics, cleaning agents, and other products, and palm oil plantations are a huge culprit in deforestation and habitat loss, especially in Indonesia, which is the world’s biggest palm oil producer and exporter. Last month the country identified nearly 500,000 acres of plantations in forest areas, which will be handed over to the state and turned back into forests.

    THE KICKER

    Researchers at the California Academy of Sciences discovered 153 new animal, plant, and fungi species in 2023, including 66 spiders, 13 sea stars, 12 geckos, one scorpion, and one legless skink.

    Yellow

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    Politics

    The Messaging War Over Energy Costs Is Just Beginning

    The new climate politics are all about affordability.

    Donald Trump, a wind turbine, and money.
    Heatmap Illustration/Getty Images

    During the August recess, while members of Congress were back home facing their constituents, climate and environmental groups went on the offensive, sending a blitz of ads targeting vulnerable Republicans in their districts. The message was specific, straightforward, and had nothing to do with the warming planet.

    “Check your electric bill lately? Rep. Mark Amodei just voted for it to go up,” declared a billboard in Reno, Nevada, sponsored by the advocacy group Climate Power.

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    Climate

    AM Briefing: EPA Muddies The Waters

    On fusion’s big fundraise, nuclear fears, and geothermal’s generations uniting

    EPA Prepares to Gut Wetland Protections
    Heatmap Illustration/Getty Images

    Current conditions: New Orleans is expecting light rain with temperatures climbing near 90 degrees Fahrenheit as the city marks the 20th anniversary of Hurricane Katrina • Torrential rains could dump anywhere from 8 to 12 inches on the Mississippi Valley and the Ozarks • Japan is sweltering in temperatures as high as 104 degrees.

    THE TOP FIVE

    1. EPA plans to gut the Clean Water Act

    The Environmental Protection Agency is preparing to propose a new Clean Water Act rule that would eliminate federal protections for many U.S. waterways, according to an internal presentation leaked to E&E News. If finalized, the rule would establish a two-part test to determine whether a wetland received federal regulations: It would need to contain surface water throughout the “wet season,” and it would need to be touching a river, stream, or other body of water that flows throughout the wet season. The new language would require fewer wetland permits, a slide from the presentation showed, according to reporter Miranda Willson. Two EPA staffers briefed on the proposal confirmed the report.

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    Spotlight

    Birds Could Be the Anti-Wind Trump Card

    How the Migratory Bird Treaty Act could become the administration’s ultimate weapon against wind farms.

    A golden eagle and wind turbines.
    Heatmap Illustration/Getty Images

    The Trump administration has quietly opened the door to strictly enforcing a migratory bird protection law in a way that could cast a legal cloud over wind farms across the country.

    As I’ve chronicled for Heatmap, the Interior Department over the past month expanded its ongoing investigation of the wind industry’s wildlife impacts to go after turbines for killing imperiled bald and golden eagles, sending voluminous records requests to developers. We’ve discussed here how avian conservation activists and even some former government wildlife staff are reporting spikes in golden eagle mortality in areas with operating wind projects. Whether these eagle deaths were allowable under the law – the Bald and Golden Eagle Protection Act – is going to wind up being a question for regulators and courts if Interior progresses further against specific facilities. Irrespective of what one thinks about the merits of wind energy, it’s extremely likely that a federal government already hostile to wind power will use the law to apply even more pressure on developers.

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