Biden's Hydrogen Roadmap Hits Stumbling Blocks

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The Biden administration has laid out an ambitious roadmap for scaling up US clean hydrogen output to 10 million metric tons annually by 2030. Most policy action so far has sought to goose supply, mainly through last year's Inflation Reduction Act (IRA), which included generous tax incentives for clean hydrogen production, as well as provisions to build regional hydrogen "hubs." But the administration is realizing this may not be enough as final investment decisions (FIDs) on hydrogen projects sputter. It is now taking actions on the demand side to help generate buyers and develop hydrogen markets. “The US focus has been on supply side carrots,” Alex Dewar, managing director for the Boston Consulting Group, told a Center for International & Strategic Studies (CSIS) event in Washington last week. The administration was armed with more than $9 billion in grant dollars in a 2021 law for establishing hydrogen hubs and an electrolyzer program, layered atop the IRA's hefty tax incentives that are the envy of the global industry. Still, among the biggest hurdles for clean hydrogen has been securing offtake agreements from credit-worthy buyers, a chicken-and-egg dilemma contributing to the dearth of FIDs and complicating Biden’s efforts to build out the regional “hub” projects.

Low-Carbon Policy, Hydrogen
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