IRA: Climate-focused Legislation Driving Green Hydrogen & Deflating Inflation

On Mar 26, 2024

TL/DR –

Air Products’ Vice President, Hydrogen, Eric Guter, has explained the three pillars of green hydrogen production as outlined by the U.S. Government: hourly matching of electricity with hydrogen production, incrementality of clean electricity, and the deliverability based on specified regions. These guidelines tightly regulate clean hydrogen production, ensuring that it doesn’t increase grid emissions or disrupt power pricing and that the clean power generated is actually delivered. The company has already committed over $15 billion in clean energy projects, with projects representing more than $12 billion of investment currently under development.

Green Hydrogen and the Inflation Reduction Act: A Climate and Clean Energy Initiative

Air Products’ Vice President of Hydrogen, Eric Guter, elucidates the U.S. Government’s guidance on clean hydrogen production, often termed as the three pillars of green hydrogen production.

The Inflation Reduction Act (IRA) is fundamentally a climate and clean energy-oriented legislation. This was central to my testimony in the public hearing on March 25, 2024, hosted by the U.S. Department of the Treasury and IRS concerning the IRA’s Clean Hydrogen Production Credit (45V).

Prior to the IRA, Air Products pledged over $15 billion to clean energy projects, aiming to expedite the energy transition. Currently, our clean hydrogen projects worldwide represent more than $12 billion of investment under development, meeting the strictest standards of clean hydrogen production – hourly-matching, incrementality, and deliverability.

We commend the proposed IRS guidelines for implementing rigorous standards for the 45V hydrogen tax credit, ensuring tangible and verifiable emissions reductions from day one.

Air Products endorses hourly matching of electricity with hydrogen production from 2028. This pillar prevents increased grid emissions from electricity generation linked to new hydrogen production.
We support incrementality of clean electricity from day one, avoiding adverse effects on grid power pricing.
Lastly, we back the deliverability requirement based on identified regions in the proposed regulations.

“The three pillars must be implemented together for truly clean hydrogen. Any deviation will obstruct, not accelerate, decarbonization, and disadvantage compliant projects,” said Eric Guter.

Proper implementation can reinforce the U.S.’s global climate leadership. A robust U.S. hydrogen market will necessitate export of clean hydrogen to global allies, affirming the U.S.’s participation in a globally recognized clean hydrogen certification system.

Stay tuned for the latest hydrogen market news at Hydrogen Central.

Learn more about Green Hydrogen and the Inflation Reduction Act here.

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