With the U.S. Treasury’s guidelines on the definition of clean hydrogen looming, Hy Stor Energy, along with industry leaders and customers, supports climate-aligned standards that account for additionality, regionality and time matching
JACKSON, Miss. and GULFPORT, Miss. and DUBAI, United Arab Emirates, Dec. 12, 2023 (GLOBE NEWSWIRE) -- COP28 -- Hy Stor Energy, a company pioneering carbon-free renewable hydrogen production and long-duration storage at scale, today reconfirmed its unwavering support for stringent, climate-aligned standards for “Clean Hydrogen” in the United States. The U.S. Treasury is expected to announce crucial guidance soon that will govern qualification for the Internal Revenue Code Section 45V production tax credit for hydrogen meeting specific standards. As a leader in carbon-free hydrogen production and storage, Hy Stor Energy supports the inclusion in the Treasury’s upcoming Section 45V guidance of the requirement that “clean” hydrogen eligible for the maximum tax credit be produced with electric energy satisfying the “three pillars” of additionality, regionality and time matching. Hy Stor Energy is aligned with industry collaborators and commercial partners, industrial end-users, and off-takers who have required the three-pillar approach in their pursuit of long-term off-take agreements for clean hydrogen.
The U.S. has the opportunity to adopt smart standards that prioritize clean hydrogen’s role in decarbonization and harmonize with the current EU standards that adopt the three pillars requirements and take into account the needs of other global trading partners. Satisfying the three pillars requirements means that the electricity used to extract “clean” hydrogen be generated by new renewable resources, in the same region and at more or less the same time as the hydrogen is produced. Where all three conditions are met, there can be no question that the hydrogen’s production has been entirely clean and has not relied on electricity sources that caused greenhouse gas emissions.
The upcoming guidance on what will qualify as clean hydrogen eligible for the maximum Section 45V tax credit has the potential to set the U.S. on a course to take full advantage of hydrogen to advance its decarbonization goals. Incentivizing the production of low- and zero emissions hydrogen will enable the U.S. to reduce the impacts of greenhouse gas emissions on burdened communities, enhance energy security and secure a leadership position in the energy transition. By embracing the requirement that clean hydrogen be produced through use of electricity generated only from clean generation resources, the U.S. will catalyze global investment and demand for renewable hydrogen in a way that supports long-term, economy-wide decarbonization.
“It’s well known that hydrogen will serve as a fuel, feedstock and energy storage medium that can play a crucial role in delivering a robust, resilient, equitable and decarbonized clean energy future,” said Laura L. Luce, CEO and Founder at Hy Stor Energy. “But not all hydrogen projects should be treated the same – priority must be given to those that truly reduce emissions by relying only on renewable sources for their electricity requirements. This means that the maximum 45V tax credit should be reserved for only those hydrogen projects that can satisfy the three pillars and therefore produce hydrogen that is truly clean.”
Hy Stor Energy has found that its commercial and industrial partners operating in DOE-prioritized industrial decarbonization sectors fully support Hy Stor Energy’s embrace of the three pillars. According to one of these partners, “We and Hy Stor Energy contend that hourly matching calculations for ‘45V’ ensure that the production of competitively priced hydrogen advances organizations that are fully committed to the most timely and efficient industrial decarbonization. The concepts of additionality, locality, and time-matching are paramount to our commitment to 100% renewable energy, despite cost and potential competitor choices.”
As the U.S. establishes standards and protocols for hydrogen production, storage and transportation, it must also look outside its borders, and ensure that it harmonizes its hydrogen standards with those imposed by U.S. trading partners. This means that to ensure that it incentivizes the production of fossil fuel free hydrogen, U.S. tax credits should reward the electrolysis processes that are powered by renewable electricity that is:
- Sourced from newly built carbon-free sources (Additionality)
- Physically deliverable to the electrolysis facility (Regionality)
- Matched hourly with the electrolyzer’s power consumption (Time Matching)
Hy Stor Energy and its industry partners urge the Treasury to establish a clean hydrogen tax credit and incentive structure based on emissions intensity, which will create opportunities to invest in national energy security, job growth and industrial decarbonization. Hydrogen production technologies that do not altogether eliminate greenhouse gas emissions should receive less generous credits, in recognition of the additional emissions, environmental burdens and adverse community impacts they will produce. Focusing incentives on the most impactful projects will open up a faster and more affordable path to net zero for companies, and entire nations, that are looking to decarbonize.
Hy Stor Energy is in the business of enabling true decarbonization. As such, it will continue to collaborate with partners and industrial end-users to advance renewable hydrogen production and storage projects this decade. Strict guidance focusing the availability of tax benefits on emissions intensity and implementation of the three pillars will enable industries and communities to achieve these goals in the near term and secure a reliable clean energy future that benefits all of humanity.
About Hy Stor Energy
Hy Stor Energy is facilitating the transition to a fossil-free energy environment by developing and advancing renewable hydrogen at scale. Its large, fully integrated projects will produce, store and deliver carbon-free renewable energy, providing customers with cost-efficient, and reliable renewable energy on-demand. Developed as part of a scalable integrated hub, these projects couple on-site renewable hydrogen production with integrated long-duration energy storage. Hy Stor Energy, led by energy storage industry and hydrogen technology veteran Laura L. Luce, has an innovative team with deep expertise and is positioned as a leader in the renewable hydrogen revolution. For more information, please visit www.hystorenergy.com.
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