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2024

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'US hydrogen tax credits would survive a Trump administration', say well-connected lobby groups

Author:

Hydrogeninsight



Trump campaign has said ex-president would seek to repeal all or significant parts of the Inflation Reduction Act if he returns to office next year

 

The hydrogen production tax credits passed by Congress in 2022 would not be repealed if Donald Trump regains the presidency, according to the influential American Petroleum Institute (API) — the country’s largest oil & gas trade association and lobby group, and a significant Republican Party donor.

 

The 2022 Inflation Reduction Act (IRA), which legislated for the introduction of the tax credits, has proved too popular in Republican states to repeal, the CERAWeek conference in Houston heard this week — even though the Trump campaign has stated that the former president would seek to undo all or significant parts of the act.

 

API CEO Mike Sommers said that there were “a lot of great provisions in the IRA” that appeal to his members, including the tax credits for both clean hydrogen production (45V) and carbon capture (45Q), which can also be utilised by blue H2 projects.

 

“I think if President Trump is in charge, there’s not going to be a full-scale repeal of the IRA. By the way, we wouldn’t support a full-scale repeal of the IRA. I think it’ll be a much more scalpel-like approach to the IRA.”

 

Dan Brouillette, who was Trump’s last energy secretary and is now CEO of the Edison Electric Institute — a trade body that represents all US investor-owned power companies — added: “I think there’s a prevailing view [among Republican lawmakers] that all tax credits are good.

 

 

 

 

“We’re going to have to see how much of them are being used to actually build things... but I think, where I sit now, I cannot overstate how important these credits are as the catalyst or the incentive to invest.”

 

But Sommers and other trade body leaders told the conference that the current Treasury guidelines on clean hydrogen production — which include rules on additionality, temporal matching and geographic correlation (see panel) — need to be changed.

 

“There’s billions of dollars from API member companies that are poised to invest in the new hydrogen economy. But that investment will stay on the sidelines if [government officials] don't get these regulations right.”

 

 

 

Nuclear Energy Institute CEO Maria Korsnick also took issue with how the rules are currently implemented, particularly the rule on additionality, which would exclude current nuclear power plants from qualifying for hydrogen tax credits.

 

“We very much want to have the ability for plants that exist currently to also make hydrogen in addition to the electricity that they provide. Why not?” she said.

 

American Gas Association (AGA) CEO Karen Harbert accused the Biden administration of attempting to “reinterpret [the IRA] through regulation”. The legislation only set the emissions levels that would qualify for certain levels of subsidies, and made no mention of other qualifying criteria that has been set out in proposed guidelines by the Treasury Department.

 

“They only want this tax credit to apply to a certain flavor of hydrogen [ie, green], where if you really want to stimulate a market, it should be open to everything,” she told the conference.

 

 

 

 

The API has so far donated more than $2m to Republican groups and individuals through its political action committee (PAC) in the current election cycle, having donated more than $5m in the run-up to the 2020 election that Trump lost, according to the Open Secrets website.

 

The Edison Electric Institute has also donated $156,000 to Republicans in this election cycle so far, in addition to $68,000 to Democrats, through its “PowerPAC”.

 

The AGA’s PAC has so far donated $91,500 to Republicans in the current election cycle, and $29,000 to Democrats.

 

Donald Trump will be the Republican Party's candidate in the US presidential election taking place on 5 November this year. If he were to win — and assuming he is not in jail — he would retake office on 20 January 2025.

 

A version of this article previously appeared on the website of Hydrogen Insight's sister publication, Upstream.

 

Source:Hydrogeninsight

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