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Green hydrogen is ‘under attack,’ Plug Power boss says

Green hydrogen is ‘under attack,’ Plug Power boss says
(Courtesy: Plug Power)

Episode 60 of the Factor This! podcast features Andy Marsh, CEO of Plug Power, who believes the U.S. could become a green hydrogen superpower. Or it could squander the opportunity of a lifetime. Subscribe wherever you get your podcasts.

This would be the last announcement for a while.

By releasing new rules for wages and apprenticeships under the Inflation Reduction Act, the Treasury Department celebrated in late August the close of the first phase of the historic climate and clean energy law's arduous implementation. Rules related to electric vehicles, domestic content, direct pay and transferability, energy communities, and the low-income adder all had been written.

But more than a year after the IRA was signed into law by President Joe Biden, a notable shoe had yet to drop. And the resulting uncertainty is fueling a multi-million-dollar advocacy campaign that has spilled from the confines of wonky trade media into mainstream channels.

At issue is the lack of clarity around how green hydrogen, a critical resource for reaching long-term climate goals, will qualify for the IRA's tax incentives. Even without the rules, the law launched a market for green hydrogen that was largely non-existent in the U.S. But advocates warn it could disappear just as quickly, depending on the Treasury Department's next move.

Watch the full episode of Factor This! featuring Plug Power CEO Andy Marsh:

A critical issue to be determined is the phase-in of the so-called "3 Pillars" for green hydrogen production: new clean electricity capacity, feasible deliverability of that power, and hourly matching for emissions. The American Clean Power Association trade group has recommended an exemption to hourly matching for all projects that start construction before 2029, a move Princeton University's ZERO Lab forecasted could lead to the unintended consequence of around $200 billion worth of incentives contributing to 700 million metric tons of cumulative CO2 emissions.

The Treasury Department's tax policy framework, when it arrives, could make or break this fledgling industry, according to green hydrogen producers and developers.

"Personally, I take this as a frontal attack on hydrogen in general by folks who just say 'electrify everything' who really don't understand the carbon footprint of the world," Andy Marsh, CEO of the green hydrogen producer and electrolyzer manufacturer Plug Power, said on the Factor This! podcast from Renewable Energy World.

An electrolyzer at Plug Power's green hydrogen production facility in Georgia. (Courtesy: Plug Power)

Marsh said he believes requiring green hydrogen production to comply with hourly matching and source locally generated clean electricity would squash the industry before it ever gets off the ground. The Department of Energy's plan for hydrogen hubs, which Plug Power is actively pursuing, would also likely become economically infeasible, he said.

Moreover, Marsh said he believes the "3 Pillar" policy framework, which has been adopted by the European Union, runs afoul of the legislative intent of the IRA.

The Fuel Cell & Hydrogen Energy Association (FCHEA), a trade organization chaired by Marsh, recently sent a letter to Treasury Department officials claiming additionality requirements would "significantly stifle the clean hydrogen market by adding unreasonable costs and delays for clean hydrogen producers."

The Marsh-led group also objected that other technologies, like batteries and heat pumps, aren't subject to similar additionality requirements.

Marsh said he was “shocked” at how aggressively some concepts have gained traction that were never intended when Congress passed the IRA. Similar concepts, he said, are not in place for any other technology.

Courtesy: Plug Power

Plug Power will be fine either way, Marsh said. The company existed before the IRA, and will continue with or without favorable incentives, albeit with a lowered growth trajectory.

"How fast we grow, how fast we make investments, where we make those investments--be it the United States or Europe or Australia--I think all those questions are on the table,” Marsh said. Questions that will be answered, he added, based on how Treasury writes its rules.