In a groundbreaking collaboration between Energy Innovation and Policy Analyst Nik Sawe, the focus has shifted to the overlooked clean energy transition in the industry sector, which is poised to become the largest greenhouse gas-emitting economic sector in the United States by 2030. While the transportation and power sectors have garnered the spotlight, industries like iron and steel, as well as chemicals, have lagged behind in reducing emissions.
The solution lies in the potential of clean hydrogen, a game-changer that could address the significant carbon emissions emanating from these industries. Thanks to increased federal and state incentives and policy support, the production of clean hydrogen is finally economically viable.
The Inflation Reduction Act’s 45V clean hydrogen production tax credit offers a subsidy of up to $3 per kilogram, incentivizing the production of truly clean hydrogen. However, the industry must be cautious not to fall into the trap of investing in suboptimal uses such as vehicle fuels or building heating, where electric alternatives are more efficient.
By focusing on high-value applications in industries like iron, steel, and chemicals, the clean hydrogen industry can flourish sustainably. Policies like the Buy Clean California Act and the Buy Clean Initiative at the federal level are creating markets for greener materials, ensuring that clean hydrogen is applied where it can provide the greatest benefits.
In conclusion, the transition to clean hydrogen in the industry sector presents a significant opportunity to combat climate change. However, strategic policy interventions and incentives are necessary to ensure that the production and application of clean hydrogen align with long-term sustainability goals, avoiding potential setbacks in the journey towards a cleaner economy.
