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The Wind Is in Hydrogen’s Sails; Politics Could Change That

Major pieces of domestic policy like the Inflation Reduction Act and the Infrastructure Investment and Jobs Act are advancing hydrogen energy technology. A change to who occupies the White House could alter this course.

Closeup of the word "Hydrogen" embossed in silver letters on the outside of a light blue car.
Major pieces of federal policy are accelerating the development of hydrogen fuel cell technology as states and local government move to decarbonize transportation and energy.

But like so much of government policy, these initiatives are coupled to politics, and a change in administration could spell trouble ahead for the growth of clean energy and transportation.

“I suspect there could be some changes,” said Gia Vacin, assistant deputy director of zero emission vehicle market development in the California Governor’s Office of Business and Economic Development. “There would be some things at risk. But I think as we get more and more momentum here it becomes more and more difficult to deny the opportunities and flexibilities, and the space that hydrogen can fill.

“I also feel hopeful that there’s recognition in the value of, and the necessity of, what hydrogen brings in our decarbonization. And that goes across party lines,” she added, speaking on a panel last month at the California Hydrogen Leadership Summit in Sacramento.

Both the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act are seen as touchstone pieces of domestic legislation for President Joseph Biden. They aim to modernize infrastructure and address climate change by advancing innovation while growing U.S. jobs.

Notably, the IRA passed along party lines with no Republicans voting in favor of the bill. The infrastructure law received more bipartisan support, but had many more Democratic votes than Republican.

Hydrogen energy industry observers say they are confident the technology’s benefits will gain bipartisan support, given opportunities for job creation, energy independence and offering a road map to transition the oil and gas industry toward “new opportunities for investment,” said Frank Wolak, president and CEO of the Fuel Cell and Hydrogen Energy Association.

“While much of the activity that we’re all dealing with right now was driven by Democrats’ politics and the IRA and tax credits, and that doesn’t necessarily bode well with some Republicans who look at that as not their philosophy — much of the goodness of what hydrogen does is bipartisan,” said Wolak in some of his comments at the summit.

Barbara De Marigny, a partner and clean energy tax credit consultant with the law firm Baker Botts, pointed out that historically, Congress has not pulled tax credits that have already been awarded.

“They may change the law to not make that available for new projects coming online, going forward. But they’re not going to change [them] such that people that build a facility premised on access to certain credits are then left without what they anticipated,” De Marigny said.

The federal investment in hydrogen energy is helping to “de-risk” the future of hydrogen technology development, and “giving us more certainty about the partnership we can have with the other states and with the federal government,” said Vacin.

The IRA alone includes at least $300 billion in tax credits which can be applied toward the building of hydrogen refueling stations, green hydrogen production, storage and other parts of the sector’s development.

“We look for this law to be implemented in a way that gives all of you the greatest accelerator of opportunity to decarbonize ... possible,” said Wolak. “That’s the spirit of the law, and that’s the way it should be implemented.”

Incentives for the hydrogen energy sector will likely be needed for some time.

“The first step for hydrogen is going to see how fast the cost and the availability of hydrogen occurs. That’ll tell whether there’s anything else needed to make the transactions work,” he said.

But keep in mind, say industry watchers, the energy sector will always lobby for — or require — incentives.

“Traditional energy has had government support for as long as it has existed. And to ignore that is silly,” said Grant Zimmerman, CEO for Amp Americas, a maker of dairy-to-biogas-renewable-energy technology, and a moderator for the panel.
Skip Descant writes about smart cities, the Internet of Things, transportation and other areas. He spent more than 12 years reporting for daily newspapers in Mississippi, Arkansas, Louisiana and California. He lives in downtown Yreka, Calif.