HYDROGEN HYPE — 2022 was a big year for policy victories. This year will be about implementation and jockeying over the details that separate winners from losers. The Inflation Reduction Act, with its $369 billion in tax incentives for clean energy, will live up to its billing and buffer the broader economic slowdown that's starting to infect climate tech. "Any space the IRA touches — there's a rising tide for everyone in there," said Apoorv Bhargava, CEO of WeaveGrid, a Bay Area software company that helps utilities handle electric vehicles' impact on the grid. "However, if there was a specific carveout for you, you're probably screaming with happiness." The law's hydrogen benefits are particularly buoyant: A production tax credit of up to $3 per kilogram, the highest in the world, could encourage petroleum refiners, fertilizer manufacturers and eventually other industries to source their hydrogen from low-carbon electricity or sequester the emissions generated from producing it from natural gas. It's a sign of where we are in the energy transition that it could either transform industry or backfire spectacularly. The Treasury Department and the IRS are taking comments on how they should structure the rules, and they're getting an earful about the risks of failing to account for pipeline leaks and the mix of electricity used to make the hydrogen, as David Iaconangelo reports for POLITICO's E&E News. (One concern recently flagged by Princeton University researchers: Even if the hydrogen is made from renewable electricity, it could end up increasing emissions if more renewables don't come online to fill the increased demand.) In the meantime, the Department of Energy is getting ready to hand out $7 billion from the bipartisan infrastructure law for regional hydrogen "hubs" that combine production, transportation, storage and consumption. DOE sent "notices of encouragement" last week to 33 hydrogen consortiums across the country, as David reports. Full proposals are due in April. GOOD NEWS FOR CARBON CRUNCHERS — The hydrogen buzz could also recharge interest in the carbon-accounting field, which got a boost last year from the SEC's proposed climate risk disclosure rule. (The timeline for a final SEC rule is TBD, and economically chastened tech companies are now less likely to be interested in supporting carbon-footprint analysis.) "Billions and billions of dollars will hinge on how the rules get interpreted," said Eric Gimon, a senior fellow with the think tank Energy Innovation. "That's really going to supercharge that field of lifecycle analysis and carbon analysis."
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