The Inflation Reduction Act will provide tax credits of up to $3 per kg of clean hydrogen.
“This is a fantastic development – and one that completely transforms the outlook for green hydrogen in the USA. Only 2 weeks ago, Biden’s bill looked dead. Now it’s alive and kicking, we can say that the USA is going to be one of the cheapest places in the world to produce clean hydrogen,” says Håkon Volldal, CEO of Nel.
The much-anticipated passing of the bill through the House of Representatives follows significant progress in the North American market for Nel, with the company’s biggest electrolyser order to date announced in July this year. The 200 MW stack, worth EUR 45 million (USD 46 million) and potentially twice that amount with additional hardware, will go live in 2024.
“What makes this record order particularly special is that it represents a change in market dynamics. The customer has secured power supply over 20 years, and end-product demand over the same time period. Similar long-term prospects will only inspire further investment in green hydrogen and related infrastructure,” Volldal says.
The coming Inflation Reduction Act is the latest in a series of political measures that are boosting prospects for green hydrogen. The EU’s RePowerEU initiative aims for 10 million tonnes of green hydrogen production within the bloc, and a further 10 million tonnes to be imported, by 2030.
Multiple nations now have national hydrogen plans. Germany’s is in the lead with a commitment to billions of euros of investment both domestically and internationally.
International political momentum and investor confidence supported Nel’s recent decision to double its Herøya plant output, with 1 GW coming online by early 2024.
“The international picture shows the power of market-based incentives and government support for green hydrogen. We of course hope to see more of the same both in Norway and overseas in the near future,” Volldal says.