The Inflation Reduction Act (IRA) is Primarily Focused on Climate and Clean Energy through Green Hydrogen

By Better Today On Mar 26, 2024

TL/DR –

Air Products’ Vice President, Eric Guter, has given his support for the US government’s proposed guidance on clean, or ‘green’, hydrogen production. The guidelines, known as the ‘three pillars’, include hourly-matching, incrementality, and deliverability, which together ensure that grid emissions do not increase due to new hydrogen production, and that clean power generated in one area is actually delivered to clean hydrogen projects. Guter believes that Air Products, which has already committed to investing over $15 billion in clean energy projects and is building clean hydrogen projects around the world, is proof that the guidelines can be successfully implemented.

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

Air Products’ Vice President for Hydrogen, Eric Guter, discusses the U.S. Government’s guidelines on green hydrogen production, often referred to as the three pillars of green hydrogen production.

The Inflation Reduction Act (IRA) is fundamentally a climate and clean energy-focused legislation. This point was emphasized in Guter’s testimony during a public hearing on March 25, 2024, about IRS proposed federal rules for claiming the IRA’s Clean Hydrogen Production Credit (45V).

Prior to the IRA, Air Products pledged to invest over $15 billion in clean energy projects to expedite the energy transition. We are already pioneering clean hydrogen projects globally, representing more than $12 billion investment that meets the rigorous standards of green hydrogen production, known as the three pillars: hourly-matching, incrementality, and deliverability.

We commend the IRS for proposing stringent standards for the 45V hydrogen tax credit to ensure tangible and verifiable emissions reductions from the get-go.

Air Products is in full support of hourly matching of electricity with hydrogen production from 2028. This is crucial for ensuring no increase in grid emissions due to new hydrogen production.
The principle of incrementality of clean electricity from Day One is strongly backed by Air Products. Incrementality confirms there is no redistribution of renewable power resources and no negative impact on grid power pricing.
We endorse the stipulation for deliverability based on regions identified in proposed regulations. This ensures that clean power generated in a region is utilized by clean hydrogen projects.

Eric Guter’s Take on Clean Hydrogen Production

Guter believes all three pillars must be implemented concurrently for hydrogen production to be truly clean. He warned against any deviation from these principles, as it would slow down decarbonization and disadvantage compliant projects.

He also mentioned the opportunity for the U.S. to reinforce its global climate leadership. A thriving U.S. hydrogen market will potentially facilitate clean hydrogen export to global allies, aligning with a globally harmonized clean hydrogen certification system.

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For further reading on Green Hydrogen and the Inflation Reduction Act, visit this source.