Siemens has developed a PEM (proton exchange membrane) electrolyser module for the research facility in Linz. With a capacity of 6 megawatts, the plant will be able to produce 1,200 cubic meters of “green” hydrogen an hour.
The U.S. Department of the Treasury Misses Deadline for Hydrogen Tax Credit Guidance
The U.S. Department of the Treasury has missed its mid-August deadline to release guidance on the type of hydrogen production eligible for the maximum tax credit under the Inflation Reduction Act. The guidance is meant to define the subsidy provided by the tax credit, which can be up to $3 per kilogram, to support the production of “green” hydrogen made using electrolyzers that split water molecules. The delay in releasing the guidance has caused frustration among industry players who are waiting to make project decisions. It is now expected that the guidance will be released in September or October.
Disagreements Over Qualifying Hydrogen Types for Tax Credit
Environmental advocates and hydrogen producers have conflicting views on which types of hydrogen should qualify for the tax credit. Environmentalists argue that only hydrogen produced using clean electricity sources, such as solar power, should be eligible since electrolyzers require a significant amount of electricity. Fossil-fuel-powered electrolyzers can result in twice the carbon emissions compared to traditional methods of hydrogen production. Industry groups, on the other hand, believe that requiring producers to build new clean energy sources to power electrolyzers will slow down the development of new hydrogen supply and increase costs. Currently, only 1% of hydrogen in the U.S. is produced using electrolysis, while the majority is produced using steam-methane reforming, a cheaper method that produces significant carbon emissions.
The Biden Administration’s Stance
The Biden administration has indicated its support for the hydrogen production industry and incentivizing the use of electrolyzers powered by fossil fuels. John Podesta, the administration’s senior adviser for clean energy innovation, stated that the goal of the tax credit is to kickstart the industry and achieve cost reductions in electrolyzers while moving towards the highest standards for green hydrogen. However, industry players are cautious about relying too heavily on Podesta’s comments, as the exact details of the Treasury’s guidance are still unclear.
The Growing Need for Hydrogen Production
The Department of Energy has stated that the U.S. will need to produce about five times more hydrogen, 50 million metric tons, by 2050 to meet the nation’s increasing demand. Hydrogen offers advantages in terms of weight and charging-time for heavy-duty applications like commercial trucking and marine transportation.
