Hydrogen tax credit criticism builds

WASHINGTON — Sen. Joe Manchin criticized the Treasury Department’s rules around clean hydrogen tax credits Wednesday as likely to bring the nascent industry to a grinding halt, increasing pressure on the Biden administration to change course.

In a hearing in the Senate Energy and Natural Resources Committee, the West Virginia Democrat said the Inflation Reduction Act that Congress passed in 2022 to spur the development of clean energy at-large included no mandate restricting clean hydrogen plants from using the power grid and accused the administration of trying to “implement the law they wanted not the one we passed.”

“That wasn’t included and never even discussed in the law. They were all made up, and we’re not going to stand for it,” Manchin, chair of the senate energy committee, said. “They take the most liberal view possible on industries the extreme left likes, like electric vehicles, and the most restrictive view possible to industries these activists oppose.”

Manchin’s statement follows similar criticism leveled last week by Exxon Mobil, which is developing the world’s largest clean hydrogen plant in Bay-town, as well as the coalitions of energy companies and academic institutions developing federally backed clean hydrogen hubs around the country, including one in Houston.

In a letter to the Internal Revenue Service on Monday, the companies partnered in Houston’s HyVelocity Hub urged a laundry list of fixes they said were necessary if they were to successfully develop a hydrogen hub on the Gulf Coast, which they said now included nine “core” projects with $10 billion in private investment.

“Successful private investment requires well-designed, supportive, and flexible federal policy to enable a full range of projects that will bring environmental and economic benefits to communities,” they said in a statement.

The Houston hub joined with six other hydrogen hubs from around the country in writing to Treasury Secretary Janet Yellen and Senior Adviser to the President John Podesta expressing their concern about the “narrow guidance provided by the U.S. Treasury Department,” which they said may “have far-reaching negative consequences for the entire domestic clean hydrogen industry.”

Manchin quipped at Wednesday’s hearing that it was the first time in his career he’d heard “California agree with Appalachia.”

“To have all of us on the same page tells us how serious this is,” he said.