WEACT Hydrogen 45V Tax Credits Testimony


My name is Manuel Salgado and I serve as Federal Research Manager for WE ACT for Environmental Justice.  WE ACT’s mission is to build healthy communities by ensuring that people of color and/or low income residents participate meaningfully in the creation of sound and fair environmental health and protection policies and practices.  I am thankful for the opportunity to provide testimony from an environmental justice perspective.  

When used in limited scenarios in hard to decarbonize sectors and when produced through electrolysis powered by new renewable energy and in adherence to the principles known as the three pillars, hydrogen has potential to be a positive force in the path towards decarbonization.  However, WE ACT and many other environmental justice organizations have long maintained that hydrogen is a false solution to our climate and pollution problems because unless it is produced in a truly clean manner and used only in ways that do not have direct electrification alternatives, hydrogen has potential to cause much more harm than good.  The 45v tax credit must be finalized with the three pillars and with the objective of ensuring that the hydrogen industry does not add to the many burdens faced by frontline and environmental justice communities.  

Over the past 2 days of testimony, I have heard organizations testify that the three pillars would make it impossibly difficult for them to produce hydrogen in an economical manner and would represent a deadly threat to the hydrogen industry.  However, these testimonies have been undercut by many others who have pointed out that they are currently producing hydrogen while adhering to those allegedly fatal principles!  Decarbonizing the economy is not an easy task but it is a necessary one if we are truly aiming to protect people’s lives from the carbon crisis.  Numerous studies have shown that electrolytic hydrogen produced without the protections of the three pillars will result in a large increase in greenhouse gas emissions over simply continuing to produce dirty hydrogen.  This is not decarbonization but in fact the exact opposite; creating a remedy worse than the disease.  The increase of greenhouse gas emissions would also be accompanied by dangerous co-pollutants such as NOx and particulate matter.  There are members of the hydrogen industry who will tell you that they cannot produce hydrogen under the three pillars even as many of their colleagues tell you they already do.  What the opponents of these principles will fail to tell you is that, in the absence of the three pillars, hydrogen production will increase air pollution and have an increased cost measured in human lives.  This cost will be paid by the environmental justice communities who live in the shadow of fossil fuel power plants.  Today, Black Americans face an air pollution mortality rate over 4 times that of white Americans.  If hydrogen is to play a role in saving lives and decreasing disparities such as this, it must be produced in a manner that aligns with the three pillars.  The Inflation Reduction Act is crystal clear on this subject: In order to qualify for a credit, hydrogen production methods must meet lifecycle greenhouse gas emissions requirements.  The three pillars are the best way to ensure electrolytic hydrogen production meets these thresholds and does not result in a large increase in greenhouse gas emissions and deadly co-pollutants.

The three pillars will also serve as a financial protection for low-income households around the United States.  Electrolytic hydrogen production is an energy intensive activity, and if new clean energy generation is not brought online to supply electrolysis demands, we will see large spikes in energy prices for Americans who can ill afford to pay more to power their homes.  We have seen a similar situation play out with the rapid increase of data centers dedicated to crypto currency.  These facilities have dramatically increased electricity demand across the nation and ,in turn, have raised the price of power for many Americans. The Department of the Treasury can avoid this outcome for electrolytic hydrogen by ensuring the three pillars remain a part of the finalized guidance.  

45v also contains provisions for hydrogen produced through methods other than electrolysis.  WE ACT stands against all hydrogen produced from fossil fuel feedstocks.  Hydrogen produced in this manner is in no way clean and results in a high volume of upstream emissions largely due to methane leakage.  It is imperative that these emissions are fully accounted for and that the GREET model accurately represents the impact these production methods have on greenhouse gas emissions.  Although the tax credit does not rule out specific hydrogen production pathways, it does clearly require lifecycle greenhouse gas emissions to not surpass various thresholds in order to qualify.  If a hydrogen production method is unable to achieve these emissions thresholds then it should not be subsidized by public dollars.  Once again, It is essential that the emissions accounting for all hydrogen production methods is as accurate as possible in order to fully comply with the statute.  

The Treasury has an opportunity to guide the country towards a future where hydrogen is an agent for positive change and decarbonization.  It is not hyperbole to state that the Treasury has the opportunity to save thousands of lives and positively impact millions of others by getting this guidance right.  There are no justifications for prioritizing the profits of companies over the lives of people.  WE ACT urges the Treasury to enact a final rule that retains the three pillars, closes off loopholes, and ensures accurate emissions accounting.  Once again, thank you for the opportunity to provide testimony. 

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