DeepSummary
The episode discusses the importance of accurately measuring the greenhouse gas emissions associated with producing clean hydrogen to ensure the effective use of funds from the Inflation Reduction Act. The complexity of factors such as additionality, regionality, and time matching in determining the true emissions impact is explored.
Eric Gimon from Energy Innovation provides insights into their response to the IRS regarding setting standards for qualifying for the new hydrogen tax credits. He explains the challenges in accounting for factors like whether new renewable energy capacity is truly additional, the varying emissions impact based on regional grids, and the temporal matching of clean energy supply and hydrogen production demand.
The massive scale of potential funding, with one project alone potentially receiving $30 billion in tax credits, underscores the need to get the rules right to prevent unintended increases in emissions or misallocation of public funds. Gimon emphasizes that even small deviations from the targeted emissions thresholds could result in significantly higher emissions due to the energy-intensive nature of hydrogen production.
Key Episodes Takeaways
- Accurately measuring greenhouse gas emissions from clean hydrogen production is crucial for the effective implementation of the Inflation Reduction Act's tax credits.
- Factors like additionality, regionality, and time matching significantly impact the true emissions associated with clean hydrogen projects.
- Even small deviations from targeted emissions thresholds could result in much higher emissions due to the energy-intensive nature of hydrogen production.
- The massive scale of potential funding through the tax credits, with one project alone potentially receiving $30 billion, underscores the need for robust standards.
- Getting the emission standards right is critical to preventing unintended increases in emissions or misallocation of public funds.
- Differing analyses on the topic highlight the complexity and importance of thoroughly understanding the various factors involved.
- Rigorous accounting for factors like line losses and the emissions intensity of displaced power sources is necessary for accurate emission calculations.
- The response from Energy Innovation provides valuable insights and recommendations for the IRS on setting appropriate standards for the tax credits.
Top Episodes Quotes
- “So, Chris, if I looked at what it means to reduce all the emissions from steam methane reform to have a perfectly clean hydrogen, and then I paid the $3 a kilogram subsidy that the IRA is providing, that amounts to about dollar 300 a ton in subsidies for carbon removal. And that's a pretty juicy subsidy right there, just for any kind of carbon removal.“ by Eric Gimon
- “So we split them into multiple buckets. So the first and most difficult bucket is what people refer to as additionality.“ by Eric Gimon
- “So whether you're displacing gas or displacing gold, that could be 20 or 40 kg/kg kind of equivalent emissions impact. Meanwhile, where you consume the power is also important.“ by Eric Gimon
- “Now, this doesn't completely match up with other analyses that you might hear about. And so I want to just take a moment to explain why they might not match up.“ by Eric Gimon
Entities
Company
Concept
Person
Episode Information
The Energy Transition Show with Chris Nelder
XE Network
2/22/23