Energy Policy Now Kleinman Center for Energy Policy

Senator Sheldon Whitehouse discusses the prospects for bipartisan U.S. carbon border fee legislation, and the need to protect the Biden Administration’s clean energy and climate achievements.

The U.S. Department of the Treasury is finalizing rules that will determine which new clean hydrogen projects will receive the IRA’s generous 45V tax incentives, and whether those projects will deliver promised climate benefits. ---

The Inflation Reduction Act provides a range of incentives for the development of clean energy resources in the United States. Highest profile among those incentives are hundreds of billions of dollars in tax credits earmarked for new wind and solar power projects. Yet the IRA’s most aggressive incentives aren’t directed at renewables but at clean hydrogen, which is a fuel that is viewed as crucial to decarbonizing parts of the economy that aren’t readily electrified, such as steel making, air travel and shipping.

Over the past few months, the Department of the Treasury and the Internal Revenue Service have been developing rules to define what will qualify as clean hydrogen, and what level of financial incentive hydrogen producers should receive based on the climate impact of the hydrogen they will make. Final rules are expected this year, and will ultimately determine whether clean hydrogen delivers on its climate promise.

Danny Cullenward, Vice Chair of California’s Independent Emissions Market Advisory Committee and a Senior Fellow at the Kleinman Center, explores the climate stakes surrounding the Treasury’s 45V hydrogen production tax credit. Cullenward explains the draft clean hydrogen rules, and why certain interests would like to see those guidelines relaxed. He also explores what the final rules might mean for the pace of clean hydrogen growth, and for the ability of clean hydrogen producers to thrive after the incentives expire.

Danny Cullenward is a Senior Fellow with the Kleinman Center for Energy Policy. He is also Vice Chair of California’s Independent Emissions Market Advisory Committee, and a Research Fellow with the Institute for Carbon Removal Law and Policy at American University.

Related Content

Coordinated Policy and Targeted Investment for an Orderly and Reliable Energy Transition https://kleinmanenergy.upenn.edu/research/publications/coordinated-policy-and-targeted-investment-for-an-orderly-and-reliable-energy-transition/

Why the IRA’s Carbon Capture Tax Credit Could Increase Greenhouse Emissions (Podcast) https://kleinmanenergy.upenn.edu/podcast/why-the-iras-carbon-capture-tax-credit-could-increase-greenhouse-emissions/

 

Energy Policy Now is produced by The Kleinman Center for Energy Policy at the University of Pennsylvania. For all things energy policy, visit kleinmanenergy.upenn.edu.
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Physical attacks on critical European energy infrastructure have risen since the outbreak of the war in Ukraine, threatening energy security and the pace of the low-carbon transition.

Local opposition to clean energy projects slows the transition to a low carbon energy system. A legal expert explores how a national policy of “repurposed energy” could speed things up.

Each fall, the Kleinman Center for Energy Policy hosts a student blog competition, where students from any field of study can showcase their creativity, innovation, and passion for energy policy and sustainability. This year, we welcomed audio submissions, and we’re featuring our first-place audio blog here. This year’s winner is Benjamin Chen, a junior majoring in economics and minoring in computer science and environmental management. Ben’s winning audio blog is titled “Corporate Disclosure Law on Energy Policy”.

Benjamin Chen is a junior majoring in economics at the University of Pennsylvania.
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A national network of CO2 and biomass transportation infrastructure, spanning pipelines to rail routes, will be needed to support the permanent removal of atmospheric CO2. Can the network be economically built?