Hydrogen is causing a buzz on Capitol Hill and rightly so. This emerging energy technology has the potential to unlock an abundance of clean energy solutions and reduce energy-related emissions — think American heavy industry — by 10% to 25%.
Hydrogen provides the United States an opportunity to strengthen America’s long-term manufacturing competitiveness and become a global leader by advancing innovative, low-emissions technologies.
Many of the opportunities to create well-paying American jobs and build next-generation manufacturing are in red states, which is why our organization, Citizens for Responsible Energy Solutions, or CRES, is working to build Republican support for hydrogen initiatives across the country.
The bipartisan Infrastructure Investment and Jobs Act established seven regional hydrogen hubs. Using different energy sources, these hubs serve as a prime example of clean hydrogen’s potential, which has multiple applications across several sectors of the economy.
With billions of dollars of federal investments pending in the nascent industry, it is in America’s interest to ensure hydrogen deployment is provided the opportunity to succeed in the market, and that requires policies that accelerate deployment — not policies that increase obstacles to building infrastructure and technologies.
Support for hydrogen, including tax incentives, is bipartisan in Congress. The hydrogen production tax credit should incentivize investment in communities across the country to support a variety of manufacturing sectors that are looking for ways to lower emissions while still meeting energy demand.
America is the world leader in emissions reduction because we embrace an all-of-the-above energy approach that values affordability, reliability and environmental stewardship, and hydrogen can play an important role in building on this success.
Unfortunately, the proposed implementation of the tax credit by the Department of the Treasury has rightly drawn criticism from industry and lawmakers on both sides of the political aisle. In turn, project development — including the hydrogen hubs — is threatened.
Instead of recognizing the important role all types of homegrown energy play in our attempt to advance a hydrogen economy, the administration elected to propose strict guidance that would ultimately pick winners and losers.
For example, the proposed guidance would not provide a pathway for existing hydropower and nuclear energy — two of the largest sources of baseload, zero-emissions electricity generation that can power electrolyzers around the clock.
It would also limit hydrogen producers using natural gas paired with carbon capture as a feedstock from accessing the tax credit, discouraging investment in one of our nation’s most abundant resources and among the most affordable ways to produce hydrogen. CRES Forum submitted comments to the administration stating just that.
“Scaling up a robust and competitive hydrogen industry in the United States will require pulling a variety of policy levers to strike a balance between the right amount of incentives, ensuring the cleanest production possible and allowing developers enough leeway to get their projects off the ground,” our recent white paper states.
We need continued investment in research and innovation. The U.S. Department of Energy’s Hydrogen Fuel Cell and Technologies Office, the Office of Clean Energy Demonstrations, other crosscutting hydrogen programs and the Loan Programs Office play an important role in ensuring the latest hydrogen technology can grow and scale.
In addition to furthering American innovation, we must articulate an explicit export strategy. While hydrogen would revolutionize energy production and manufacturing at home, it provides the United States an incredible opportunity to become a leading energy exporter to our friends and allies around the world, displacing dirtier sources from geopolitical rivals such as China.
We must reduce barriers and provide regulatory certainty. Instead of the Department of the Treasury’s restrictive approach to the hydrogen tax credit, a flexible, more phased-in adoption would better encourage use of the incentive and increase return on investment for American taxpayers.
And finally, we must streamline permitting to put the federal government’s dollars to work, put shovels in the ground on hydrogen projects across the country, and ensure we have an efficient transportation and refueling system for hydrogen once it is produced.
Hydrogen can play a key role in affordably lowering emissions here at home and abroad, and we can’t afford to misstep if we want America manufacturing to be globally dominant in the coming decades. We look forward to continuing our work with federal lawmakers to ensure the United States gets it right.
_____
(Heather Reams is president of Citizens for Responsible Energy Solutions (CRES). Rebecca Lorenzen is senior policy manager for CRES Forum and the author of the white paper “ Growing an Industry for Clean Hydrogen.”)
_____
Source Agencies
