Happy Thursday!
Back in October
the U.S. Department of Energy Demonstration Office (OCED) H2Hubs Program pick
Houston’ HyVelocity Hub as one of
the awardees for federal grants. Now it
looks like the HyVelocity Hub might be losing a member, after the draft of
rules were released by the U.S. Treasury Department in December. Check out of our Blog on October 18, 2023, and
October 31, 2023, for information about HyVelocity Hub and its members.
Did anyone
happen to read The Houston Chronicle’s Texas Inc. on February 25, 2024, their
article titled, “Exxon warns Baytown, other hydrogen projects might stall –
Federal draft rules trim tax incentives to create cleaner fuel hubs across the
U.S.”? In the article, it speaks about
the U.S. Treasury Department’s strict guidelines for the tax incentives also
known as 45V
may have members of HyVelocity leaving the team with the current
proposed rules. Exxon Mobil’s Baytown
refining and petrochemical complex may be leaving the team, after the current
draft of rules aren’t an incentive for their plan as they are currently written.
Exxon is proposing to make blue hydrogen but using carbon capture and sequestration as a way to reduce greenhouse gases
(GHG) and the tax incentive is the lowest level of tax credit would make their
project not attractive to move forward on. The tax incentive levels are based on how
they convert to hydrogen. The highest
level is $3 a kilowatt which one would have to produce green hydrogen using
only renewable energy with current technology is very expensive and it takes a
large amount of electricity to split water.
The kind of project Exxon was planning to do would have to settle for 60
cents a kilowatt which wouldn’t take into account their lower GHGs. The final tax incentives haven’t been written
in stone and the U.S. Treasury is still taking comments. The hydrogen industry
and its future appear to be hanging on the incentives, and they are hoping the
rules will be flexible to give time for the technologies to develop to the
greener future we all hope for. If you
would like to read more of The Houston Chronicle’s article, please click
the link: Exxon warns Baytown, other hydrogen projects unlikely (houstonchronicle.com).
If you would
like help in looking into how to transport your product efficiently, safely, and
with less of a carbon footprint, contact us via email in the blog and check out
our ESC's website!
We hope you have a wonderful evening and a great rest of
your week!
**Disclaimer: You may be charged a fee to read The
Houston Chronicle’s article. **