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Congressional Climate Action Plan - Hydrogen Spotlight

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Background of the Climate Crisis Action Plan

On June 30, 2020, the Select Committee on the Climate Crisis (“Select Committee”) released its comprehensive climate plan titled “Solving the Climate Crisis: The Congressional Action Plan for a Clean Energy Economy and a Healthy, Resilient, and Just America” (the “Action Plan”).  The Action Plan lays out a framework for comprehensive congressional action to achieve the Select Committee’s stated goals of reducing carbon pollution, making communities more resilient to the impacts of climate change, and building a durable and equitable clean energy economy.  More specifically, the Action Plan sets a goal of reaching net-zero greenhouse gas emissions in the United States by no later than 2050, directs the president to set interim targets to meet or exceed that goal, and calls for achieving net-negative greenhouse gas emissions during the second half of the century.

Role of Hydrogen in the Climate Crisis Action Plan

The Action Plan describes the potential of hydrogen to facilitate a shift to lower-emission energy sources, including:

  • providing medium- to high-temperature heat;

  • enabling innovative processes, such as the production of low-emission steel; and

  • supplying low-emission industrial feedstocks.

While recognizing the potential for hydrogen to contribute to a low-emission economy, the Action Plan states that 95% of the current hydrogen production uses steam methane reforming, which creates carbon dioxide as a byproduct.  Accordingly, the Action Plan states that decarbonization of the hydrogen production process will be necessary, through either the “green hydrogen” electrolysis method using zero-carbon electricity from renewables or nuclear or combining steam methane reforming with carbon capture to generate low-emission “blue hydrogen.”

Action Plan Recommendations

The Action Plan recommends that Congress strengthen and expand research and development programs for low emission hydrogen and its use in industry.  The Action Plan also recommends that Congress increase funding for the Department of Energy to strengthen and expand hydrogen research and development to support innovation in low- and zero-emission hydrogen production and storage and create new initiatives for industrial uses of hydrogen in feedstocks, industrial processes, and heating.

In addition to increased funding for research and develop of hydrogen as a fuel source, the Select Committee recommends that Congress provide tax incentives for industrial hydrogen use and low emission hydrogen production, including;

  • a technology-neutral production tax credit for low emission hydrogen production which is tiered based on the emissions displaced in production and the end-use application; and  

  • an investment tax credit for industrial hydrogen end uses, such as equipment upgrades at facilities that switch from emissions-intensive heating or processes to using hydrogen, not including equipment for hydrogen production.

To achieve wide use of hydrogen at reasonable costs, the Action Plan emphasizes the importance of developing hydrogen infrastructure in regions where industries already use industrial hydrogen and where it can be produced with low or zero emissions.  The report notes that the Gulf of Mexico, particularly Louisiana and Texas, would be an ideal region for the industry to demonstrate hydrogen infrastructure hubs.  To better facilitate these specific goals, the Action Plan recommends that Congress direct the relevant agencies to

  • create a hydrogen infrastructure development plan;

  • review the regulatory framework for hydrogen infrastructure development; and

  • amend existing or implement new regulations, and codes and standards, to enable the construction of infrastructure aligned with the development plan.

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