IRA To Drive Green H2 Price To Ready For Primetime

Why the US climate bill may be the single most important moment in the history of green hydrogen; Inflation Reduction Act will make US renewable H2 the cheapest form of hydrogen in the world — and other countries will not want to be left behind

Leigh Collins, 9 August 2022 (ReCharge News)

“The $433bn Inflation Reduction Act of 2022 creates a tax credit that would pay clean hydrogen producers up to $3 per kilogram (adjusted for inflation)…The size of the tax credits available to US clean hydrogen producers depends on the lifecycle greenhouse gas (GHG) emissions of each project — and more importantly, on how much staff are paid…So the basic tax credit rate for “qualified clean hydrogen” is set at $0.60/kg, with a sliding scale depending on lifecycle emissions [including upstream methane emissions] — measured in carbon dioxide-equivalent (CO2e) — of the H2 produced…

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…Hydrogen manufactured [before 2033] with less than 0.45kg of lifecycle CO2e emissions per kg of H2 [verified by an unrelated third party] would receive 100% of the credit…[But the wage requirement can multiply] the size of the tax credit by a factor of five…[If laborers and mechanics employed by contractors and subcontractors are paid] at prevailing rates for construction, alteration, or repair of a similar character…

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…[B]lue hydrogen projects would be ineligible for H2 tax credits if they already receive federal tax credits for carbon capture and storage — but green hydrogen projects would also be allowed to receive renewable energy tax credits valued at $30/MWh in addition to the hydrogen ones…” click here for more

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