This is Dana Perkins and your listening to Switched on the BNAF podcast. Draft guidance for the US hydrogen Production tax Credit was introduced in December of twenty twenty three, with the aim of promoting decarbonization in hard to abate sectors and enhancing energy security in the country as well. The draft guidance requires electrolysis projects to meet additional criteria, including hourly matching between clean energy production and power consumption.
While some applaud the draft guidance for preventing greenwashing and driving real decarbonization, others view these requirements as excessive in fear they could potentially discourage investment in green hydrogen production.
On today's show, we bring you a discussion from bnaf's recent summit in New York, where Martin Tangler, who leads BNF's hydrogen research, spoke with Kathleen Baron, Executive vice president and chief Strategy Officer at Constellation, alongside Claire Bahar, chief commercial officer at High Store Energy, and Elena Scaltreaty, chief commercial officer at TOPSO and l. Lastly, Andy Vezy, President
and chief executive officer at forties U North America. During their lively discussion of the forty five v tax credit. They considered whether a heavy focus on green hydrogen production overlooks hydrogen adoption, and they compared the US to Europe, where you do see demand side incentives. As they consider what it will take to build out a hydrogen industry in the United States, they got into which technologies are going to help them get there and the associated costs.
Agendas and videos from previous b andF summits, including this one, can be found at BNF dot com under the events tab. As always, if you like this podcast, make sure to subscribe on Apple Podcasts, Spotify, or wherever you get your podcasts, and consider giving us a review to make us more discoverable by others. Right now, though, let's hear Martin's panel from the BNF summit in New York titled Controversial Shifts in America's green hydrogen Landscape.
Let's jump straight in.
So when President Biden signed the Inflation Reduction Act in August twenty twenty two, many in the hydrogen industry saw it as a turning point, as a real game changer. A three dollar per kilogram tax credit for anybody who can make hydrogen with very, very low carbon emissions, but almost two years later, no one has actually received a single dollar because we're waiting for guidance on how these
credits can be claimed. In December, the Treasury and the IRS published a draft of this guidance, and this draft is quite controversial for including the so called three pillars of additionality, time matching, and deliverability. Most companies want leniency on these three pillars, but some are in favor. Billions of dollars.
Are a stake in this debate, and everybody agrees on one thing.
We need final rules as soon as possible, and this is where we get to our panelists. Claire, you've become quite famous recently for coming out in favor of these really strict rules. So I'm going to quote your recent testimony at a public hearing on March the twenty fifth, where you said high store energy urges the Treasury and the IRS to adopt the three pillars approach, requiring additionality from day one, strong deliverability standards, and a phase in
of hourly matching by twenty twenty eight. First, can you explain to us what these three pillars are so we educate the audience, And second, what makes it possible for you to argue in favor of these three pillars when some of our other panelists and most of the industry seem to be in favor of some leniency.
Perfect.
Thank you Martin, and thank you Bin Yaf for the upper to need to speak today. I'll start with defining what the three pillars are. The three pillars are strict guidelines in relation to the guidelines.
For grid connected electrilizers.
And these guidelines are to ensure that there is robust accounting for the carbon emissions associated with grid connected electrilizers. And so, starting with additionality, it's a requirement that new new green electrons are powering the electrilizers. For regionality, this is to ensure that the clean hydrogen production is in the same location as the clean electricity that's powering them. And this is to ensure that you're not claiming green
electrons in West Texas, for example. Are then correlating to your project, your hydrogen project in the new work.
And then lastly is time matching.
That's to ensure that the clean electricity is being produced at the same time as the green hydrogen production. So the guidelines have a transition periods similar to that of the EU that allow for an annual matching until twenty twenty eight, and then from then on it's an hourly matching. And the reason why these three pillars are so important, it's to ensure that we're investing in long term infrastructure that are decreasing emissions instead of in fact increasing emissions.
And unfortunately, today our electric grid is still predominantly fossil fuel based sixty seventy, as high as eighty percent in some locations.
And so if you are putting on a large.
Load and you're not then adding more renewable electricity such as wind or solar, you are in fact increasing the demand for fossil fuels that would be backfilled by peakers that are coal and natural gas and so high store energy.
You know, really applauds the Treasury.
For taking this stance and ensuring that the three pillars are upheld. And from our perspective, our project prior to the guidelines is going to be three pillar compliant from day one. And our first project is the Mississipi Clean Hydrogen Hub, which couples on site, off grid dedicated renewables for our electrolysis production and salt cavern storage CO located and storage gives us the ability to store access hydrogen and then it is dispatchable on demand four times when.
The wind isn't blowing and the sun isn't shining.
And you know, holistically, we're in this business to decarbonize and it's not about just having another another molecule. We say, if you're going to burn natural gas, burnatural gas, don't.
Go through all the loops, okay to get there.
So it's a combination of those off gride renewables as opposed to on grid, which I think that's that's relatively easy to understand. You managed to save some costs by not paying some of the expensive grid fees, and then those that salt cavern storage, right, and the salt caverns is to me that that's a really really key factor of the projects that you're building.
And salt caverns.
Are quite quite rare, right, You don't get to build salt caverns just just anywhere. I don't think you could build a salt cabon Europe because we're not sitting on a salt deposit right now. So would you consider building projects if you didn't have salt caverns?
Well, So the salt cavern storage is really key for both the scale and the duration. It's that long duration, that multi day, multi week and seasonal energy storage that we're prioritizing in the off take markets we're looking at, which are the energy intensive industries where direct electrification is not a viable option. And it's these off take markets, for example, steel, that are the first movers that are already there with their customers showing the green premium that they.
Want a zero carbon solution.
And from the commercial point of view, this transparency in carbon emissions is exactly what our customers are asking for to.
Ensure that they can.
Account for their scope one, two and three emissions and most importantly that the products they're producing today in the United States with clean hydrogen is competitive and accepted on a global scale.
Okay, so customers wanted one final one before we get to Andy, who I sure, I'm sure has very different, very different view on this. So would your position be different, Claire if your project was not based on top of salt caverns, which you'd be also asking for some leniency There.
No, because leniency with the market in such infancy, there is urgency, but we cannot be sacrificing urgency with investing in infrastructure that's going to continue to lock in fossil fuels.
The goal is decarbonization and.
To transition off of fossil fuels and hydrogen is an excellent solution because it provides that molecule that can be stored and transported over long distances, and we need to be prioritizing it in the areas of the economy where direct electrification is not a viable option, and not trying to have it spread thin, wide and thin.
It needs to be concentrated.
Okay, good to know.
So no leniency even if you don't have if you didn't have salt caverns.
Okay.
I wonder what Andy has to say, because Andy, you are one of the strongest, is asking for those more lenient rules in your testimony in that same hearing where Claire was speaking in March, you said, I'm quoting forty five V in its current form is a strait jacket on the energy on the emerging industry. The only solution is to add a minimum include grandfathering first mover projects.
First, can you explain what grandfathering means?
And then second, why do you feel this way if Claire says that she can make her projects work even with those strict rules.
Yeah.
Sure, And first of all, let me say that I hope everybody's sitting in this panel is wildly successful because because we need very low carbon hydrogen, right, we need it as soon as possible, but we needed to have it at the lowest possible cost, right. I think there's a lot in here to unpack. And you know, I
think we've talked before. I said that you know where you stand on this issue starts with where you sit, right, And if I was sitting in a similar position, then I could basically say, Yep, I'm supportive of these things because I know why seventy five percent of the industry can't compete with me because I can't do it and it's all price. So I think that's great. But here's the deal. We're not doing projects here. We're trying to
build an industry. We're trying to build an industry, and the key in building the industry is driving the cost of every molecule down. I always get challenged, well, nobody wants to buy green hydrogen. No, nobody wants to pay the price. But if I could sell that green molecule at the same price as grey. Everybody would buy green hydrogen. We'd all be happy as heck. Right, So how do
you get there? Well, the Body Administration in the Inflation Reduction Act anticipated driving the cost of that molecule down by twenty thirty to a dollar a kilogram.
And this was really to incent and get this started. Right, And why is it so important that we have as many projects going now?
Include I mean the early ones that don't meet the three pillars or one of the three pillars, because almost all of them can meet one, which is deliverability.
I can't find too many that don't. Right. Why is it so important?
Because the more you do, the more projects that go, the ones that are successful, the ones that fail. You're building economies of scale, economies of manufacture to bring down your costs, and economies of novels. You get smarter about how to do it. You got to drive that engine.
To be successful. And here's the deal.
If we made the same requirements from this industry to have to bring its own green electrons to the party, and we made that apply to everybody who was making electric vehicles, I would not be driving my electric vehicle today.
Why this one. Right. And here's the other issue. We're trying to solve too.
Many problems with one piece of rulemaking. Right, there are two point six tero watts of renewable standing in queues. That's twice the installed total capacity. Now we're going to require even more pressure to push through that houses in the industry going to start. Yes, I'm very happy that high store is going to have a project.
I really am. But that's not going to build an industry.
You have to open and broaden that aperture, right, and then it will close over time.
We're not advocating that.
We people don't pay attention to the three pillars because they are critically important. Right, you said it. We have no totally green grids, right, we have done right. The other thing we don't have is we don't have enough green electrons. We have to sort that in time. But we're saying that for projects that can get into construction by twenty twenty eight, they should be grand funds so we get them going.
Right.
And one other issue which no one talks about outside the Three Pillars is the creep model. So every year you have to reevaluate the credits you're getting what they're worth.
Who can finance a project that way. So there's a lot of work to be done.
But here's the deal. Every effort, every effort is good. Let's widen the aperture, let's not restrict it right off the bat. So we have a few projects because here's what forty five in its purest form will do.
It will make the plant smaller.
All right, you can ask me why, but I'm not going to explain.
Now.
Smaller, there will be fewer of them, and they will cost more. Estimates right now is that projects will increase in cost between one hundred and forty one seventy five percent.
To the end consumer.
How are you going to build demand that is ensuring absolutely ensuring that high carbon intensity hydrogen.
Comes into this market. So let me stop there and.
I get it.
So, more expensive hydrogen, fewer projects, smaller projects. So you said your position, You know you stand where you sit. Why don't you or why doesn't Fortescue sit on top of salt caverns?
Well, I'll tell you where we do so. Well, first of all, look, I think you said it right. They're very few and it's not all salt, it's domo salt. And if you look at a map. There are only so many, right, it's a scarce resource. But if you'd ask me where Fordescue sits, it sits on planet Earth. Yeah, we all do, right, we all do, and therefore get to decarbonization with a molecule for people who can't use an electron should be in all our best interests. Widening
the amperture, right, doesn't impact I store. Right, you call it lenient, or you called it lenient, that's a judgment already.
I call it appropriate.
Right, So let's build an industry here, and let's not try to solve every problem with one piece of rulemaking today when we're really building an industry for the twenty thirties and twenty forties.
Right, I call it more lenient, not linient. Andy.
One final for you before we move on to Elena and Kathleen. So both you and Claire, this is really interesting. Both you and Claire are members of GH two, which is one of the strictest hydrogen standards before you have to produce your hydrogen at one kilogram of CO two or less per kilogram of hydrogen that you make. Your CEO, Andrew Forest is on the board of the GH two organization. So isn't your dislike of the hourly matching pillar at odds with your membership of the GH two.
No, I don't think so, because it doesn't actually specify hourly matching, monthly matching, or annually matching. What it does requires we follow the rules and laws that are in place that it does.
Look.
I think for FORDESCU, we have an absolute commitment that we will never leave anything worse offt than when we come, whether it's a water aquifer, the community in terms of what we're doing, or that we will directly impact in higher emissions of CO two.
We have a.
Project in Washington State, in Washington State, they manage that in Washington State. It's hydro power in Washington State. That project would not meet this requirement, and it's a perfectly good project.
This is what we have to sort out.
There's nothing There are a few pieces in conflict here, but what's non in conflict for anybody on this stage is the urgency by which we have to produce those very low carbon intensity molecules.
So let's get at it.
Let's make it so people can come to this game and we can learn, we can build, we can manufacture.
And here's the other piece of it.
If we're increasing the cost of these projects, what's a project developed going to do. You're gonna buy the cheapest electualized as you can know where they're.
Made China, tie them.
And the whole purpose of this bill was to build infrastructure in this country.
We have a report on electronizing in China. They're not gonna have it as easy as it seems.
Even let me tell you, they'll have it easier when everybody's buying them, because they have to get those costs.
Down here to manage the cost of that molecule. All right.
And here's the other thing. Fortescue is a large public company in Australia. We're in thirty different countries and I have to go before Andrew Farst and tell them why I think he should put a dollar of his money here versus Morocco, versus Egypt, versus Norway. Right, So, think about where capital is going to go, where the capital flows are going to go. And one other aspect of this and the Inflation Reduction Act was the creation of
an industry having capital invested here. So these are the things why we're concerned about and why we might have a slightly different view on this than.
High stool good.
Good to know that your membership of the G two standard is not at odds with your arguments for leniency or more leniency on these rules.
Moving on to Elena, So Elena.
Many green hydrogen proponents say that the proposed guidance, the strict guidance, benefits blue hydrogen by being too strict on green and therefore constraining green hydrogen and making blue the default technology to go to. And your company, top so So licenses a blue hydrogen technology called sincore to firms like
Exxon and Fidelis. But your client, Exxon is now threatening to ditch a blue hydrogen project that would use your technology because the rules would make it hard for them to qualify for the clean Hydrogen credit and they would have to settle for a lower credit, the forty five Q credit for carbon.
Capture and storage. So what is your view?
Does the current guidance on green hydrogen help blue hydrogen by constraining green or does it hurt blue hydrogen because it doesn't get those doesn't allow them to get those credits.
So thank you and really pleased to be here. Let me start by saying that at TOPS we have the beauty of having a number of technologies that actually speak to all colors, and for that, we are color agnostic when it comes to hydrogen. So in fact, we tend to talk about low carbon hydrogen and renewable hydrogen.
And when you look at our.
Portfolio of technologies, it's true we have blue with our sinker, which is fully commercial and fully scaled technology, but we are making huge investments for our size of company in green with the electoralizer, the sec electoralizer, So we are really invested in both technologies and in many more because we are as well in renewable fuels. So as a
matter of fact, we are quite agnostic. And as and said, we are all for the carbonization in whatever form and shape it takes place, as long as it takes place fast enough that we can commit and actually get to our twenty to fifty targets. So I think everybody that talks about forty five V at the moment is unhappy, whether.
It's green or blue.
So in any shade of color, when we think of green, and we think of our own investments and the customers we talk to, there is certainly a concern about availability of fitstocks to actually scale the technology, tests, the technology make it making sure that it comes you know, at
the right cost, in the right amount of time. But also when we speak to our customers in the low carbon hydrogen and low carbon ammonia for that or blue hydrogen and ammonia, they do have concerns that actually, as it is shaped at the moment, the forty five V
doesn't really favor decarbonization. Why because actually it sets a standard which is for the calculation of the carbon intensity based on the carbon intensity of the fitstocks, which are based on historical heverages, So actually not favoring projects and those and those project developers that want to be more ambitious that actually want to make investment towards decarbonizing the whole value chain methane emissions and also being more ambitious
on the carbon capture on the process of hydrogen production, hence actually failing a bit the whole purpose and the philosophy of the i RA and the forty five V specifically.
So if we have advice accordingly, we would actually advise changes both with regards to green hydrogen and to low carbon hydrogen, and just with the purpose of doing things quickly enough that you can scale up technology, but that you can also enable and implement technologies that are already fully scaled and commercial and can bring an enormous impact in a relatively short amount of time.
Okay, So Topsail winds either way, whether it's blue or green, or low carbon or renewable.
What a happy company?
No, I always say, I don't know if it's by design or by luck, but we sit right in the middle of the energy transition, and our ambition is actually to make it happen. And it's just good that I think we're quite neutral towards the quarter that it is to take.
Okay, do our other panels have anything to say? And de Claire, what do you guys think about the impact.
Of this guidance on blue? Is it good for blue? Or is it bad for blue?
I think the common I'll make is, unfortunately, so much attention has been brought to forty five V and almost pitting green hydrogen companies against each other, while no attention has been put on forty five Q with blue hydrogen. So I think, you know, as Andy said, everyone up here in favor of green, and it's it is about decarbonization.
So I think I'll say.
That, okay, or all in favor of decarbonization, that's good.
So if not, we were in the wrong place.
Moving on to another topic, and this is where we bring our last panelist to Kathleen. Kathleen, your company, Constellation has the biggest nuclear fleet in the US, twenty one reactors.
If I check correctly.
Now, the nuclear industry has struggled somewhat economically in the recent past, at least so my colleagues in the Power team tell me. So it's not a surprise, of course that the nuclear industry would like to get some benefits from from making making hydrogen. But the draft guidance right now excludes most nuclear because of the additionality claws. So if you're three years or older, your plants is three years older than you know, you don't qualify it with
the current rules. So your CEO, Joe Dominguez, in an interview with Bloomberg called the additionality rule crazy.
So how that's that's quoting quoting it.
How important is hydrogen And it seems like hygien really is very important for the nuclear industry, But how important is it for nuclear industry? Is it a matter of life and death for the nuclear industry that these credits don't work out?
Then, you know, we're folding.
So I have to start out by saying, not only do we have an expert moderator, but we.
Have a comedian moderator. So this is the best panel I've ever been on. This is great.
Hydrogen is important to nuclear nuclear is important to hydrogen. I just I need to go back to the passage of the bill. This is not like a policy conversation. I am a recovering lawyer, so I have to focus on the fact that the statute is explicit that nuclear can be used to power an electrolyizer and make hydrogen that can qualify for the credit. In fact, we are already making clean hydrogen with nuclear energy at an electrolyizer that we built in New York right next to one of our plants.
The reason we built that is because we've got.
A grant from the Department of Energy to build that electrilyizer. We've also gone to grant to power one of the seven hydrogen hubs, the one that is encompassing the Midwest States. Not going to happen if we can't use the nuclear energy to make the hydrogen at that For that hub, all that work, that's nine hundred million dollars of an investment. That's on pause while we wait for the guidance to come out. So we'll see what happens when we see the final rules. But you said a moment ago, no
one's making hydrogen here. We're making hydrogen here, we're claiming the credit. So if we have to visit with the courts to sort out whether the final guidance is consistent with the statute or not, we've already had center mansion offered right an Amikus brief.
The people who wrote this bill.
Didn't write additionality into it. They knew how to specify when something needed to be built by a certain date. They didn't do that with respect to the electricity going into the electrolyzer.
They just said it had to be zero carbon.
We make more zero carbon magwats than anyone in the country.
One out of every ten comes out of one or.
Machines, and so yes, we are focusing on this as a way to ensure the long term operation of the nation's nuclear fleet. The Inflation Reduction Act was the first time the federal government provided a credit to existing resources. So the fleet is receiving your credit, But unlike the other credits in the Act, it does expire in eight years.
So if a nuclear reactor were able to sell clean electricity, whether through the grid or directly behind the meter to an electoralizer, those types of contracts only need to be You could still claim the credit if you sign one of those contracts early in the twenty thirties and it's in place for ten years. So it's a long term potential revenue stream to provide the reactor a reason to stay on the grid past the expiration of the forty five year credit.
Okay, so this is a long term mechanism for nuclear to live. And I'm glad you mentioned the other credit because that was going to be my next question. Nuclear industry is getting its own forty five you credit for.
Nuclear power plants.
So do I understand it correctly that the forty five view in your view is not giving you enough of a long long, you know, long enough supply of money, and then you would need for the longer term to be producing the hydrogen.
Yeah.
To be clear, forty five view is designed to ensure that a reactor can recover its cost of operations if market prices are below its cost of operation. So, unlike credits for wind and solar, the forty five U credit actually phases down as market prices go up. It has
that built in consumer projection feature. But the point is it expires in eight years, So unlike the renewable credits, which will be in place till all of your children are grown and have their own kids, this this this credit will not be So it is a potential revenue source. You know, all the points we've made here about demand
are accurate. We need to have a market for this commodity, and therefore we need to get going at bringing down the cost, as we've done with other types of technology, so that it can be a long term source of revenue. But you know, we're sort of stuck in the starting blocks here, and you know, this notion of additionality just
we struggle with it just economically. I mean, if the logic is that wind farm or solar farm wouldn't be there but for the hydrogen credit, I just I struggle with that because I know all of you who woke up this morning and say, gee, I wish we had more wind and solar on the grid.
You don't think, well.
Geez, if only we had more hydrogen, you know, subsidies. It's we don't have an interconnection queue that works. We need wind, and we need zoning and permitting to improve. We need a better supply chain, We need the skilled workforce. We have demand for new renewables.
They are not coming on the grid because of hydrogen.
So if you're using renewables to make hydrogen, you are accountable the grid when you use new resource the same way as the argument goes, you do so if you're using an existing resource. So we need to build more clean We need to get to a clean grid. We're trying to do too much with this credit. You know, the courts don't usually love it when agencies that aren't you know, experts in something to try to manage it.
So I fear that's where this is going if if we don't have some more rationality in the final rule.
Okay, so we learn about the importance of the hydrogen credit to the nuclear industry. Now what I'm interested in is the other way around. What's the importance of the nuclear industry to the hydrogen industry? And clear I think you're in particular actually said in that March testimony that you would actually favor exceptions from additionality for nuclear power plants.
Could you explain the reasoning behind that.
Yeah, And I think you brought up the point, which is, if it is making it so that an asset is not going into retirement, then this is a firm based load, zero carbon source. And whereas if you are not adding new renewables to a grid, from our view, that is cannibalizing. We're adding massive demand by plugging an electrolyizer into a grid, and we are not adding more zero carbon assets to
that grid. What's going to happen, in turn, is that it's going to fuel more fossil fuel generation to then feed that load.
So we can't. We need to be creating.
A more a decarbonized grid, but also a more resilient grid.
And nuclear additionality exceptions help that. Sorry, and exceptions for nuclear from from additionality help help if it.
Keeps yes, then if it keeps that asset from going into retirement.
Okay, Kathleen say you are going to say something.
Yeah, I think that's right, and I think the Treasury suggested as much in the proposed role. So we'll see what that translates into into in terms of flexibility in the final world. What we've said is, you know, if you're causing a station to seek a second license renewal, in other words, approval from the government to run for another twenty years, and that is sort of in the same time vicinity as the contract with the hydrogen customer
that should qualify. There's also a suggestion that there'd be some you know, potential phase in or you know, if you look at what the EIA says, not what we say, but the EIA says about what will happen when this forty five ye credit expires, we will see nuclear retirements. They estimate that's twenty percent of the fleet, so you get up a twenty percent exemption something like that. Ten percent, those are all in the mix. But your question was
is nuclear important to hydrogen? And I think that is true because and it's why it was explicit in the statute that nuclear existing nuclear can make hydrogen is because it is operating twenty four to seven and that is the way to get the most efficiency out of your electoralizer, to have a constant sorts of power at the power quality that you need that runs ninety five percent of
the time. So it's you know, you don't want to take the cheap stoption off the table right out of the bat and that's essentially what we've done with this guidance.
So we also publicly common and put into our testament testimony exemptions for nuclear We may never use nuclear electrons.
We may, but right now we don't.
We don't mean intention to, but we think it's important because it goes back to my initial argument. I hope they have electoralizers, really big ones that every nuclear plant they have. Why, because then someone has to produce more electoralizers. The more you produce economy as a manufacturer, the price goes down.
They tect. Somebody invests in advanced membrane technology.
Everything that pulls and creates demand for all the bits and pieces that make it is good for the entire industry.
Right, and I finished. I have one more point.
I don't buy into blue why because I don't think the future to a decarbonized world is the pathway has methane underneath it. But at this point I'm not arguing incident because again I want everybody to be successful. At the end of the day, the market's going to decide what they want to buy. Right, And that's another piece
to the incrementality thing. The idea that we should have tax policy allocating a scarce resource to me, is nuts, right, because I go back to my argument, why is this the only industry that has to bring their own Everybody who wants to buy it should be as to do the same thing. And then what you do You have a market because we'll compete. My view is, if I can buy a green electron and I can pay the price for it, that must be the highest value for it,
and otherwise somebody would ask to pay more. Let markets decide. But the bottom line here, we're getting overly focused on these little bits and pieces of policy of tax policy and rulemaking.
When we're trying to build an industry.
Remember the administration's goal one dollar kilogram by twenty thirty. There is nothing in this rule making proposed rule making that will get us there.
Yeah, So that actually leads us to the final part of this discussion. I think it's fitting that we have only nine out of forty minutes left and we're talking about the most important topic because that's how it seems to work throughout the whole discussion around hydrogen, which is demand for hydrogen. So my team believes that BNF that the world and the US needs demand side incentives. So for somebody to actually want to buy the hydrogen that
you guys produce. But the tax credits, which we just spent thirty minutes talking about, they are worth one hundred billion dollars and they're all for the producers. And the US does have a demand side incentive being developed right now, but that's a one billion dollar incentive, So we're talking one to one hundred ratio possibly for the demand side,
which is very different from Europe La right. Europe has the subsidies, it has the carbon prices, it has the quotas and the mandates, so lots of demand side incentives going on over there. So, as someone who just came to US from Europe, should the US be doing more on supporting the demand side or incentivizing the demand side in order to get the industry going, creating an industry like Andy's saying, So.
First of all, coming from the European perspective, everybody in Europe has been talking about the IRA as a game changer and as actually you know, an initiative that has drawn a lot of you know, investments towards the US, and I think it's a great initiative and it's really trying to move the needle now I come from Europe and based in Copenhagen, and Europe is I think the best in class for mandates.
So for the famous stick, we are very good at that.
Now and we also have subsidies. But you know, it's much more complex to get subsidies in Europe than to get text credit through the IRA. And we do as well have some experience because we are looking at a US site for our electoralizer production as we speak, and we realize that, you know, the tremendous difference in complexity in going through this discussion. But back to you to
your question. I mean when we talk to our customers in the in the US and we have a very broad pipeline of projects here in the region driven by the IRA, and they really blossomed as soon as the IRA was was published.
It's two things.
It's certainty for the incentives, clarity and long term sustainability of the incentives. And the other side, because it's text credit and it's when you produce, is that you have a demand and the demand at the moment is not clear at all, and actually there's no driver in the US in North America that would you know, really incentivize them. And then as you say, the one billion from the taken from the hydrogen hub.
It's a good idea, but it's a very timey thing.
So actually US and the future US producers would be looking at Europe or at Northeast Asia, Japan and Korea to actually export. And I think, you know, if we want to make this successful. It's great that Europe is doing this, and you know it will drive demand, it will impose.
A competitive issue on.
The European producers, but US should also think about how to really deploy demand to make this a success.
Thank you to our panelists.
I think it's clear that the forty five V credit is a very very hot debate. I think no matter how it's going to pan out, the US is going to become a leader on low carbon hydrogen. And it's clear that our panelist companies are going to be at the forefront of it all.
So thank you very much.
Thank you to our panelists and Native the Day everyone.
Today's episode of Switched On was produced by Cam Gray with production assistance from Kamala Shelling. Bloomberg NIF is a service provided by Bloomberg Finance LP and its affiliates. This recording does not constitute nor should it be construed as investment advice, investment recommendations, or a recommendation as to an investment or other strategy. Bloomberg ANIF should not be considered as information sufficient upon which to base an investment decision.
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