The Fight to Define ‘Green Hydrogen’ Could Determine America’s Emissions Future

by Emily Pontecorvo (Grist) ... A decision with profound implications for that goal now lies with the Treasury Department, which must settle a debate over the best way of crafting a tax credit designed to advance the production of clean hydrogen. Scientists and climate advocates warn that without rigorous guidelines dictating who is eligible for the subsidy, the government could spend billions propping up hydrogen production facilities with enormous carbon footprints, wiping out many of the other climate gains catalyzed by the legislation.

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The fuel has the potential to replace oil, gas, and coal in a range of applications, from aviation to industrial processes like steelmaking and chemical manufacturing. Most importantly, it does not emit carbon when it’s used.

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The tax credit is designed to reduce the cost of a carbon-free method that requires only electricity, water, and a machine called an electrolyzer. Producers can earn up to $3 per kilogram of hydrogen they produce this way. The tax credit has no cap, and could pay out more than $100 billion over the lifetime of the credit.*

The question for the Treasury is how to measure the emissions from the electricity used. About 60 percent of U.S. electricity still comes from fossil fuels. Plug your hydrogen plant into the grid pretty much anywhere in the country today, and it could result in higher emissions than the conventional production method that uses natural gas.

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Late last year, a prominent energy modeling group at Princeton University circulated new research showing that hydrogen producers could all but eliminate this emissions impact by following three principles. These are the rigorous rules that the Natural Resources Defense Council and other environmental groups want the Treasury to adopt.

First, producers must contract with new renewable energy resources like wind and solar farms or geothermal power plants, ensuring that enough new clean electricity comes onto the grid to cover the hydrogen plant’s demand. Second, these resources must feed into the same regional grid that the hydrogen plant uses, with no transmission bottlenecks between them. And third, hydrogen producers must match their operations with these renewable energy resources on an hourly basis. That means if they buy power from, say, a solar farm, they have to shut down when the sun goes down.

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Instead, NextEra and others in the industry urge the government to accept a scenario in which they buy enough renewable energy to cover their electricity usage on an annual basis. READ MORE

Whites Pit solar now commissioned – South West’s first green hydrogen project about to start (Ethical Power)

DOE hydrogen hubs: 4 issues to watch (E&E News Energywire)

Excerpt from Ethical Power: Ethical Power Ltd has commissioned the 5 MW Whites Pit solar farm in Wimborne for Canford Renewable Energy. The solar park will feed into a green hydrogen electrolyser as part of the Dorset Green H2 project. READ MORE

Excerpt from E&E News Energywire: Here are four things to watch as DOE selects the hubs:

Who’s chasing the money?

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But so far, the identities of many applicants to the DOE program — and the details of what they want to do — remain a mystery.

After receiving a flood of 79 “concept papers” outlining ideas for a hydrogen hub, DOE whittled down the field in December by encouraging the authors of 33 concept papers to submit a full application.

But DOE has declined to reveal which companies and states were behind those concept papers. And many of the industry coalitions that have advertised their participation in the competition have not offered key details on their plans, such as the production methods for their proposed hub and their expected rate of CO2 emissions.

In March, environmental justice and climate advocates in California issued a news release that accused state officials of shutting out community groups from hydrogen hub planning.

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DOE has faced similar criticisms.

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Some lawmakers in the Republican-controlled House, meanwhile, are turning new attention on oversight of clean energy demonstrations. One bipartisan bill introduced in February by leaders of the House Science, Space and Technology Committee would require DOE’s Office of Clean Energy Demonstrations, which oversees the hydrogen hubs, to deliver a report to Congress that includes contracts struck by DOE with award recipients, a list of project milestones and “any material modifications” to the project.

What comes after the deadline?

Department officials will judge the hub proposals on five basic criteria, comprising technical merit, financial viability, the envisioned speed and strength of construction, the qualifications of the applicants, and plans to bring benefits to local communities and disadvantaged areas.

According to the infrastructure law, at least one of the hydrogen hubs should use fossil fuels as a feedstock. Another must produce its hydrogen from renewable energy. A third must use nuclear power. Two of the hubs must be sited in natural gas-producing regions.

DOE is also required to pick at least one hub that demonstrates hydrogen’s consumption within the power sector, heavy industry, residential and commercial heating, and transportation, respectively.

Once DOE selects the winners, the money will flow out slowly and in phases, meaning the department’s support isn’t guaranteed over the long term.

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How clean will the hubs be?

Perhaps the most contentious question surrounding DOE’s process is what level of greenhouse gas emissions the department will enforce in exchange for federal funds.

Last summer, DOE issued a draft of a clean hydrogen production standard, with what it described as nonbinding “guidance” on the hubs’ emissions (Energywire, Aug. 23, 2022).

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Four kilograms is also the maximum amount of life-cycle carbon emissions allowed for companies wanting to claim production tax credits for clean hydrogen under the Inflation Reduction Act.

The climate law’s limits are likely to become a benchmark for the DOE hubs’ participants, if they want to be financially viable over the long term, according to observers.

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But there is still no single methodology that “clean” hydrogen companies must use when they measure and report their emissions.

The closest thing to such a methodology is being developed by the Treasury Department. Officials there are due to release guidance in coming months for the Inflation Reduction Act’s hydrogen tax credits.

For hydrogen hub coalitions, access to those tax credits could hinge on the Treasury Department’s guidance.

The Treasury process has also generated controversy. For instance, many developers want to use emissions-intensive grid electricity to derive hydrogen from water molecules. Environmentalists and emissions researchers say that practice could be bad for the climate and disagree with developers about when Treasury should allow it (Energywire, Dec. 23, 2022).

Others have said “blue” hydrogen tied to natural gas use and carbon capture should not be supported, considering it involves continued use of fossil fuels. The process is favored by the oil and gas industry but opposed by some green groups.

Then there are questions about how hydrogen produced by the hubs could be used. Emissions researchers point out that burning hydrogen in power plants, for example, could generate nitrogen oxide emissions in large enough volumes to inflame respiratory illness in residents. Some environmentalists also say that using the fuel for building heat would be unreliable, expensive and possibly unsafe.

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Where will all the hydrogen go?

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Outside of the Gulf Coast, few regions of the U.S. have pipelines that are ready to transport hydrogen or facilities where the fuel could be stored, for instance. READ MORE