Plug Power critical of new rules
COLONIE — Hydrogen fuel cell maker Plug Power, which is seeking to become one of the world’s largest producers of so-called green hydrogen, was critical Friday of the Biden administration’s new clean hydrogen tax credit rules.
The rules were released Friday morning, although most of the proposed details had been previously leaked to the news media during the 2023 United Nations Climate Change Conference, or COP23, in Dubai earlier this month.
Hydrogen is considered a good source of renewable energy since when it is used in fuel cells, for instance, the only byproduct is water vapor. But traditional ways of making hydrogen are carbon-intensive, and so the tax credit is designed to encourage the manufacture of clean or “green” hydrogen made from water. A process called electrolysis can extract hydrogen from water, although the process requires a lot of electricity.
Green hydrogen is made from electrolysis but also uses renewable energy to power the process, thereby eliminating any greenhouse gas production in the entire lifecycle.
The rules, which were released by the Treasury Department, are designed to ensure that the tax credit doesn’t end up creating more greenhouse gases. Under the new rules, electrolyzers would have to be powered by new renewable energy sources instead of existing sources so they don’t cannibalize renewable energy required for the electric grid.
Also, the renewable power source would have to be in the same grid area as the electrolyzer facility, and in the future, the power drawn from the grid would have to have been generated within that same hour.
Plug Power CEO Andy Marsh, who has been vocal about the industry’s need for less
stringent rules around the tax credits, issued a statement Friday provided to the Times Union that said the “framework would fall short in achieving” the Biden administration’s climate change goals since industry would face tough roadblocks to take advantage of the credits.
“A robust domestic clean hydrogen supply is essential to decarbonizing heavy industry, and the draft regulations are counter Congress’ intent and the statutory mandate of (the new tax law),” Marsh said in his statement. “Plug’s commitment to the green hydrogen economy is steadfast, and we are hopeful that the comment period will afford Treasury the policy and legal insights to ultimately advance a final rule congruent with Congress’ statutory directive.”