Recently, the Biden administration has released a proposal on how to obtain billions of dollars in tax credits for the hydrogen industry, hoping to promote the development of renewable energy and its technologies in the United States. But clean energy companies have warned that strict subsidy standards may stifle a key industry.
The US Treasury Department stated in this 128 page proposal that the scale of tax credits available to US clean hydrogen producers depends on the lifecycle greenhouse gas (GHG) emissions of each project, with subsidies ranging from 60 cents to $3 per kilogram of clean hydrogen produced by businesses over a period of 10 years.
Officials also say that the new hydrogen subsidy proposal is the best way to promote the development of the industry without increasing emissions, and it was coordinated with the Environmental Protection Agency and the Ministry of Energy.
For a long time, hydrogen has been a dream of clean energy advocates. Hydrogen can generate energy, and the only byproduct is water. Climate change has made hydrogen a favorite among oil companies, steel manufacturers, airlines, and other industries facing emission reduction pressures.
And tax credits are of great significance, possibly covering more than half of the cost of typical green hydrogen projects. It will define a new industry because the production cost of clean hydrogen is too high and cannot be produced without subsidies.
In order to obtain relevant tax subsidies, the US government requires that the clean energy used in hydrogen production must come from newly built clean power projects in the past three years.
