Biden administration presents nuclear trade path to hydrogen tax credit score

By Timothy Gardner

WASHINGTON (Reuters) – The Biden administration mentioned on Friday nuclear energy crops will have the ability to safe profitable tax credit for manufacturing of what it calls clear hydrogen if the credit assist stop reactors from retiring.

The brand new guidelines settle one of many final and most contentious points associated to the Inflation Discount Act, a 2022 legislation that’s supposed to battle local weather change by subsidizing applied sciences that slash greenhouse-gas emissions. 

Some environmental teams argue that present clear vitality sources corresponding to nuclear reactors mustn’t qualify for the IRA’s clear hydrogen program, which is seen as crucial to decarbonizing heavy trade and a few autos. Utilizing nuclear crops to supply hydrogen siphons clear vitality away from the grid that would have been utilized by different electrical energy shoppers, they are saying.

“If a nuclear retirement is averted then the extra demand from hydrogen manufacturing won’t have induced emissions,” elsewhere on the grid, the Treasury Division mentioned in a launch.

The U.S. Treasury printed the ultimate guidelines on Friday, adjusting a earlier hydrogen plan issued in late 2023 to make it extra favorable to nuclear energy and different industries.

It’s unsure how the incoming administration of President-elect Donald Trump will strategy hydrogen manufacturing.

Frank Wolak, CEO of the Gasoline Cell and Hydrogen Vitality Affiliation, mentioned in an announcement the trade can now “stay up for conversations with the brand new Congress and new Administration concerning how federal tax and vitality coverage can most successfully advance the event of hydrogen.”

The brand new guidelines say that as much as 200 megawatts of a reactor’s power-generation capability could be thought of new clear energy and gather the credit, in the event that they have been in any other case susceptible to shutting down because of poor economics. 

“The intensive revisions we have made on this remaining rule present the knowledge that hydrogen producers must maintain their tasks shifting ahead and make the US a world chief in really inexperienced hydrogen,” mentioned John Podesta, the senior adviser to Biden for worldwide local weather coverage.

At present, most hydrogen is produced with fossil fuels at a fraction of the price of cleaner options.

The brand new guidelines additionally enable natural-gas-fired amenities that produce hydrogen to entry the credit in the event that they set up tools to seize and bury their carbon-dioxide emissions.

Treasury mentioned the foundations will decide the worth of the credit earned by such crops by contemplating leakage of the highly effective greenhouse gasoline methane throughout pure gasoline manufacturing, in a forthcoming local weather mannequin for hydrogen often known as GREET that covers lifecycle emissions.