Maximizing True Emissions Reduction: Tailoring Blue Hydrogen Production Tax Credits in the US
Key Ideas
- A new study suggests that blue hydrogen's eligibility for production tax credits in the US should be project-specific and location-dependent.
- The study emphasizes the importance of considering the spatio-temporal variation in methane emissions across the oil and gas supply chain for accurate assessment of blue hydrogen's emissions intensity.
- Tailoring production tax credits to specific projects and locations can help ensure true emissions reduction and maximize the environmental benefits of blue hydrogen.
- Direct measurements have shown significant variation in methane emissions, highlighting the need for a location-specific approach when incentivizing blue hydrogen production.
A new study published in the Nature Energy journal recommends that the eligibility of blue hydrogen for production tax credits under the US' Inflation Reduction Act (IRA) should be tailored to specific projects and locations to guarantee genuine emissions reduction. The study highlights the critical role of location in determining the lifecycle greenhouse gas (GHG) emissions intensity of blue hydrogen, stressing that 'location matters.' Recent evidence from direct measurements conducted across the oil and gas supply chain has revealed substantial spatio-temporal variations in methane emissions, directly influencing the emissions lifecycle of blue hydrogen. By acknowledging these variations and tailoring production tax credits accordingly, it is possible to ensure that the environmental benefits of blue hydrogen are maximized. The study underscores the importance of a location-specific approach to incentivizing blue hydrogen production in order to accurately account for methane emissions and effectively reduce overall emissions in the long run.