Bloomberg has reported seeing an internal company memo declaring that ExxonMobil is lobbying the US Government for blue hydrogen to qualify for tax credits as part of the Inflation Reduction Act (IRA).
Most industrially produced hydrogen is currently known as ‘grey hydrogen’ produced from natural gas. Unfortunately, this results in substantial carbon dioxide emissions as a by-product of the process. Blue hydrogen attempts to remedy this by capturing most of the carbon emissions and sequestering them somewhere, such as in a depleted oil or gas field. Currently only green hydrogen produced through electrolysis qualifies for 45V credit under the IRA, which provides $370 billion in support for clean energy and climate-related areas, such as renewable energy generation, vital minerals, energy storage, and hydrogen.
Along with biofuels and carbon capture and storage, ExxonMobil’s low-carbon solutions division has positioned blue hydrogen as one of its main pillars. Exxon’s vice president of government and public affairs, Matt Furman, argued in an interview with Bloomberg that the technology could be made sufficiently clean to qualify for an IRA subsidy, which could be as high as $3 for each kilogram of hydrogen. He said US Government officials were coming round to this point of view:
“Their view is the model would say that hydrogen we can produce has lower carbon emissions and therefore would qualify for a higher tax incentive.”
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