Inflation Reduction Act Programs Could Establish the U.S. as a Market Leader in Hydrogen
For the growing U.S. hydrogen industry, the Inflation Reduction Act (IRA) is transformative. Today, nearly all hydrogen is produced from fossil fuels to be used as a chemical feedstock and for refining—emitting carbon dioxide in the process. Recently, thanks to state incentive programs, federal funds, and voluntary corporate commitments, clean hydrogen has been gaining ground in the U.S. for applications such as commercial transport, backup power, forklifts, and other large emerging applications at the pilot stage. Programs defined within the IRA will create a sea change: by subsidizing each step in the hydrogen value chain, the IRA snowballs the industry’s recent momentum and unlocks a much wider array of clean energy opportunities.
There are several big wins for industry hopefuls: a much-anticipated hydrogen production tax credit (PTC), $5.8 billion in direct grants for decarbonization of large industrial facilities, additional funding for the Loan Programs Office (LPO) in the Department of Energy (DOE), a standalone storage investment tax credit (ITC) for which hydrogen storage is eligible, and new credits for key hydrogen end uses such as clean fuels production and clean heavy-duty vehicles.