Tax Credits Boost Transition to Green Hydrogen in US Industries
Key Ideas
- Study shows US tax credits can make green hydrogen competitive with grey hydrogen in industries.
- Green hydrogen production through tax credits could lead to lower costs and reduced carbon emissions.
- Recommendations include strategic tax credit distribution and building solar/wind farms for hydrogen production.
A study from UNC-Chapel Hill's Gillings School of Global Public Health reveals that tax credits in the US can make green hydrogen a cost-effective and environmentally friendly option for industries. Green hydrogen, produced from water, offers a cleaner alternative to grey hydrogen, commonly made from natural gas. The study emphasizes the need for more industries to adopt green hydrogen to drive down costs through economies of scale. Tax credits, currently offered through the Inflation Reduction Act, can bring down the cost of green hydrogen production, making it more affordable than grey hydrogen. However, the study warns that tax credits alone will not be sufficient for widespread adoption. The researchers recommend sector-specific strategies and targeting larger tax credits to industries ready to switch to green hydrogen. By building dedicated solar and wind farms for hydrogen production and rethinking tax credit distribution, the US could see a 4.6% increase in green hydrogen use and a 7.3% decrease in greenhouse gas emissions. These changes could be achieved at a lower cost to the federal government compared to the current flat-rate model. The study highlights the importance of creating a customer base for green hydrogen to make it a competitive and sustainable energy option for industries.
Topics
Training
Renewable Energy
Environmental Impact
Clean Energy
Tax Credits
Economic Incentives
Industry Transition
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