ROBERT WALKER: GOP Should Rethink Cutting Energy Tax Credits

When Washington gets into a spending cut frenzy it invariably results in the future becoming sacrificed for the present.  Science and technology end up being placed on the chopping block to protect current social welfare spending.  In the current budget discussions, our chance to build a strong energy economy around use of abundant, safe hydrogen is at risk.  Issues like national and border security are of great importance, but they will depend on the development of energy options that fit the future.

Across the country, families are struggling with skyrocketing living costs, including the energy we use to heat our homes, power our appliances, and fuel our vehicles. Thankfully, since Day 1 this administration has made clear that harnessing American energy production and focusing on ways to lower costs is a priority.

But efforts to completely axe all energy incentives passed in the 2022 Inflation Reduction Act (IRA) to offset increases that will be included in the reconciliation package could undermine this goal. The IRA included tax incentives for a wide range of energy investment, but most glaringly championed renewables as well as EV production and fueling stations. But not all incentives are linked to well established technologies like solar, wind, and EVs. In fact, several provisions in the bill were linked to promising tools needed for expanding our energy portfolio.

Among the shortsighted moves in the legislative text proposed by the Ways and Means Committee was their removal of incentives for low carbon technologies like hydrogen – an emerging fuel poised to transform industries from transportation to manufacturing.

Known as the Clean Hydrogen Production Tax Credit – or 45V for short – the provision is an important business incentive that will help American companies be competitive in this emerging space, create jobs in rural communities like Texas and Louisiana, and establish a more diversified energy future.

Clean hydrogen stands out as a commonsense solution for policymakers on both sides of the ideological debate around energy. Hydrogen is an abundant and versatile energy source that produces almost no carbon dioxide emissions when used. It can also be developed using our abundant U.S. natural gas resources, avoiding the volatility associated with global supply chains and the expensive extraction processes typical of oil and gas.

This is a real game changer that has huge upside potential. According to data in a report from Citizens for Responsible Energy Solutions an estimated 9.8 million metric tons per annum (“mmtpa”) of blue hydrogen capacity is in development across the U.S. They calculate that this amount has the potential to power over 18 million homes. Imagine what we could see if there was a concerted effort to scale up? Additionally, Hydrogen can also power energy-intensive industries such as cement production, steelmaking, and transportation sectors like aviation.

But the initial investment required for hydrogen production facilities and related infrastructure will need to be substantial if they are to reach their full potential. Preserving 45V incentives provides the security businesses need for these investments and easing financial risks for the private sector will accelerate the timeline for this sustainable energy solution.

Not to mention, the global race around hydrogen is already in full swing. China is currently the world’s leading hydrogen producer, building an early lead in electrolyzer manufacturing that enables “green hydrogen” production. If Congress strips away hydrogen incentives, we risk ceding our competitive edge abroad and slowing the deployment of transformative technologies at home.

The United States has a significant opportunity to become the global leader in hydrogen energy. Tax incentives, such as the 45V credit, enhance the potential for expanding American leadership in low-carbon hydrogen production. These initiatives also align with President Trump’s objective to “unleash American energy,” leveraging our already robust natural gas resources.

Congress needs to reconsider their plans to completely remove tax provisions like 45V. Now we need Senate Finance to take a stand and preserve key incentives which support and strengthen American energy, rather than weaken it.

Former U.S. Representative Bob Walker is former chairman of the House Science Committee and the U.S. Energy Secretary’s Hydrogen Advisory Committee. 

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.