Tax credits to the nuclear industry in the US to generate green hydrogen

Washington. President Joe Biden’s administration declared that nuclear plants in the United States will be able to obtain lucrative tax credits for the production of what it calls clean hydrogen, if they help prevent reactors from being retired.

The new rules settle one of the latest and most controversial issues related to the Inflation Reduction Act (IRA), a 2022 law that aims to fight climate change by subsidizing technologies that drastically reduce carbon emissions. greenhouse gases.

Some environmental groups argue that existing clean energy sources, such as nuclear reactors, should not be eligible for the IRA’s clean hydrogen programme, which is seen as critical to decarbonising heavy industry and vehicles.

Using nuclear power plants to produce hydrogen diverts clean energy from the grid that could have been used by other electricity consumers, they say.

If nuclear power plant retirement is avoided, the additional demand for hydrogen production will not have induced emissions at other points in the network, the Treasury Department says in a statement.

The U.S. Treasury released final rules on Friday, adjusting an earlier hydrogen plan released in late 2023 to make it more favorable to nuclear energy and other industries. It is unknown how President-elect Donald Trump’s administration will approach hydrogen production.

Frank Wolak, executive director of the Fuel Cell and Hydrogen Energy Association, said in a statement that the industry can now expect conversations with the new Congress and new administration on how federal fiscal and energy policy can more effectively advance hydrogen development.

The new rules state that up to 200 megawatts of a reactor’s power generation capacity can be considered new clean energy and receive the credits, if it would otherwise be at risk of closure due to unprofitability.

John Podesta, Biden’s senior advisor on international climate policy, said: The extensive revisions we have made in this final rule provide the certainty hydrogen producers need to move forward with their projects and make the United States a global leader in truly green hydrogen..

Today, most hydrogen is produced with fossil fuels at a fraction of the cost of cleaner alternatives.

The new rules also allow natural gas facilities that produce hydrogen to access credits if they install equipment to capture and bury their carbon dioxide emissions.