Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Economy

The Clean Hydrogen Rules Will Be Delayed Until at Least October

The Biden administration will miss a deadline in the Inflation Reduction Act, as it tries to regulate one of the climate law’s most generous —and contentious — tax credits.

Janet Yellen and hydrogen infrastructure.
Heatmap Illustration/Getty Images

The Biden administration is planning to publish rules governing one of the most generous subsidies in its new climate law — a tax credit for clean hydrogen — no earlier than October, missing a key deadline inscribed in the law, according to a source familiar with the process.

The rules revolve around one of the most contentious questions that has emerged after the law’s passage: How do you know that your electricity is clean? The debate has divided climate activists, hydrogen companies, renewable developers, and nuclear-power plant owners.

The ultimate answer could — by one estimate — determine the flow of more than $100 billion in federal subsidies over the next two decades.

The new rules could come as late as December, the source said, missing the deadline by as much as four months. The climate law required the Treasury Department publish guidance about the hydrogen tax credit within one year of its passage. Because the law was signed on August 16, 2022, that deadline will arrive next week.

Get one great climate story in your inbox every day:

Hydrogen is key to the Biden administration’s climate strategy. The colorless, odorless gas has the potential to replace fossil fuels in industries that are otherwise difficult to make climate-friendly, including steelmaking, shipping, aviation, and fertilizer production. While hydrogen does not emit any carbon when burned, today most hydrogen is made from natural gas in a carbon-intensive process.

The new tax credit is designed to make cleaner production methods more competitive, and it offers the largest reward — $3 per kilogram of hydrogen — to companies that can make hydrogen without emitting almost any greenhouse gases at all.

The issue before the Treasury Department is how companies should calculate their greenhouse gas emissions when trying to qualify for this credit. But there’s no universally accepted way to do this accounting. That is an especially big problem for a method of producing hydrogen called electrolysis, which uses electricity to split water into its constituent hydrogen and oxygen atoms. The process is incredibly energy-intensive, but it can be emissions-free, as long as the electricity comes from a carbon-free source.

A major debate has erupted among energy companies, environmental groups, and academics over what should qualify as carbon-free electricity. Earlier this year, researchers from Princeton University’s ZERO Lab warned that the Treasury Department’s decision could risk a major increase in emissions, underwritten by billions of public dollars, if not crafted carefully. Most — but not all — of the nascent clean hydrogen industry has pushed back on their analysis, warning that onerous rules would “devastate the economics” of clean hydrogen.

As we’ve previously reported, the complicated tax credit could transform the nuclear power sector and America’s energy economy writ large. It could also drive the formation of a booming domestic clean-hydrogen industry — but only if the Biden administration gets it right.

Read more about the hydrogen rules:

The Green Hydrogen Debate Is Much Bigger Than Hydrogen

Yellow

You’re out of free articles.

Subscribe to access Heatmap's exclusive climate and energy polling, award-winning journalism, and subscriber-only events. Save $57 on an annual subscription, just $156 $99/year.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Daily Briefing

How the Blue Tsunami Strengthened the Permitting Bill

If Democrats plan to restore the solar and wind tax credits, then passing BAAJA now suddenly looks like the savvy move.

A wave, power lines, and the Capitol.
Heatmap Illustration/Getty Images

This is Heatmap Daily, a weekday digest written by our executive editor. Subscribe here.

So here we are. The bipartisan permitting reform bill has cleared its first and most important procedural hurdle in the Senate. On Monday evening, 73 senators voted to end debate on the Bipartisan American Affordability and Jobs Act, or BAAJA, which would broadly make it faster and easier to build federal infrastructure projects of all sorts, especially power lines.

Keep reading...Show less
Blue
Politics

Senate Permitting Deal Wins First Vote

BAAJA survived its first test, but Trump says the bill “hasn’t been fully negotiated.”

Donald Trump, energy, and the Capitol.
Heatmap Illustration/Getty Images

The Senate on Monday night moved to open debate on the Bipartisan American Affordability and Jobs Act — just after the president bizarrely threw cold water on the deal he struck for the bill.

Senators agreed to invoke cloture on a motion to proceed to the bill by a vote of 73–25, a forceful bipartisan tally that could bolster momentum behind the bill. Up next comes what Senator Sheldon Whitehouse, the Democrat from Rhode Island and one of the key sponsors of the bill, called a “healthy amendment process” at a press conference Monday morning. This will constitute the last remaining opening for senators and outside constituencies to try and change provisions they disagree with. How many amendments will make it to a vote, however, is not publicly known. Nor is how fast debate on the bill will move along, so best be patient.

Keep reading...Show less
Climate Tech

Geoengineering’s Closed-Door Coming-Out Party in Iceland

Researchers, advocates, and funders gathered to discuss intervening in the global climate on purpose.

Scientists.
Heatmap Illustration/Getty Images

For decades, deliberately intervening in the Earth’s climate system was something most scientists and policymakers didn’t dare talk about. But last month, more than 250 people from six continents gathered in Reykjavik, Iceland for a three-day summit devoted entirely to willfully tinkering with the climate to make it more resilient.

The gathering served as a purposeful, if hesitant, coming out party for a field so controversial that just a few years ago, hundreds of researchers signed the Solar Geoengineering Non-Use Agreement, which called for an end to public funding for scientific research into the field. But this summit revealed that the sector — while still deeply divided over questions of money, governance, and deployment — is beginning to emerge from the shadows.

Keep reading...Show less