Developers hoping for clarity on what constitutes green hydrogen in the US might to have to wait until the end of 2023 while the US government makes sure that its hotly anticipated guidelines are legally watertight, Hydrogen Insight has learned.
A source with knowledge of the matter revealed that the Treasury and Department of Energy (DOE) are taking extra time shoring up the guidelines to ensure they are legally robust — a development that suggests officials are anticipating legal action when the rules are finally published.
Hydrogen Insight is not revealing the source, because that individual was not authorised to disclose such information.
Junior officials at the Hydrogen Americas Summit in Washington DC yesterday were unable to confirm or deny the length of the delay or the reasons behind it, and neither the DOE nor the Treasury, which is leading development of the guidelines, had responded to questions from Hydrogen Insight at the time of publication.
Frank Wolak, president and CEO of the Fuel Cell and Hydrogen Energy Association, the US's biggest hydrogen trade association, separately told Hydrogen Insight on the sidelines of the conference that the delay could be due to uncertainty over the government’s efforts to get its annual budget approved by Congress over the past few weeks, during which a federal government shutdown was narrowly avoided.
“They [the DOE and the Treasury] have all the information they need to make a decision,” he said.
The hydrogen rules — which were widely expected to be unveiled in August — are critical because they determine which projects will be eligible for the 45V subsidy, under which green H2 producers can receive a maximum production tax credit of $3/kg.
They also impact blue hydrogen projects — those using fossil gas and carbon capture and storage — as the guidelines will determine the regulations governing how emissions are calculated, having a direct bearing on how projects’ meet the US’s emissions intensity thresholds for clean H2.
The extra legal work could indicate that the US government is preparing to introduce some version of additionality for green H2 projects — in which developers can only source power from new installed renewables capacity — and/or temporal matching, requiring electrolysers to operate in tandem with renewable generation.
Senior government officials suggested in August that a compromise position — in which additionality and other rules would be gradually phased in over time — would be taken in the final guidance.
Hydrogen proponents in the US are campaigning strongly against additionality and electrolyser/generation matching, claiming that it will stifle the country’s burgeoning clean H2 industry, while environmentalists are warning that not implementing strict rules would increase renewable hydrogen’s emissions.
The Treasury was due to announce the rules on 16 August, exactly one year after the Inflation Reduction Act passed into law.
And there was palpable disappointment among delegates yesterday when Energy Secretary Jennifer Granholm, the keynote speaker at the Washington DC conference, explicitly told the audience that she was not going to make any announcements.
Tomeka McLeod, BP’s US vice president of hydrogen, used a lunchtime speech to lament the lack of guidelines for green or blue H2, pointing out that the announcement has already been pushed back twice and emphasising that developers need clarity in order to proceed with their investments.
Hydrogen developers have also been awaiting word from the DOE about the winners of its $7bn Hydrogen Hubs competition, for which the department is expected to choose six to ten regional clusters to receive government cash.
Granholm said the department was “very close” to announcing the final winners.