Norway-headquartered hydrogen company Nel Hydrogen reports that the US’s Inflation Reduction Act will provide tax credits of up to $3/kg of clean hydrogen, putting the country in the lead for clean hydrogen manufacturing.
Nel CEO Håkon Volldal says the move is a “fantastic development” which will “completely transform” the outlook for green hydrogen in the US.
“Only two weeks ago, [US President Joe] Biden’s Bill looked dead. Now it is alive and kicking. We can say that the US is going to be one of the cheapest places in the world to produce clean hydrogen,” says Volldal.
The much-anticipated passing of the Bill through the House of Representatives follows significant progress in the North American market for Nel, where the company’s biggest electrolyser order to date was placed in July.
The 200 MW stack, worth €45-million ($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,” Volldal says.
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,” he adds.
The coming Inflation Reduction Act is the latest in a series of political measures that are boosting prospects for green hydrogen. The European Union’s RePowerEU initiative aims for ten-million tonnes of green hydrogen production within the bloc, and a further ten-million tonnes to be imported, by 2030.
Multiple nations now have national hydrogen plans. Germany 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,” he says.