Manchin calls upcoming hydrogen tax credit guidance ‘horrible’: ‘We are fighting it’

Sen. Joe Manchin (D-W.Va.) has attacked proposed hydrogen tax credits from the Biden administration, calling them “horrible” and vowing to fight them.

The hydrogen policy is expected to be released by the Treasury Department next week, Manchin said. The tax credits have been at the center of a complex debate over methods to fund and encourage hydrogen production.

Manchin wrote a hydrogen tax credit into the Inflation Reduction Act (IRA), but he said the White House-proposed implementation isn’t what he had in mind.

“We are fighting it,” he told Bloomberg on Wednesday. “It doesn’t do anything the bill does. They basically made it 10 times more stringent for hydrogen.”

Much of the debate surrounding hydrogen centers on what the definition of “clean hydrogen” really is. Hydrogen is required for innumerable industrial processes, including steel and cement production, and reducing greenhouse gas emissions in its manufacturing is seen as a key method to fight climate change.

But Manchin and other Senate Democrats have raised concerns that the Biden administration’s upcoming policy doesn’t support the industry as much as it should.

A group of 11 Democratic senators, including Manchin, penned a letter to Biden administration officials pushing for looser requirements on the tax credits last month.

“In the long term, this may hamper the development of a robust clean hydrogen market, undermine … production and price-parity goals, reduce the positive effects of scaling up … investment, and prevent clean hydrogen from fulfilling vital roles in hard to decarbonize sectors,” the senators wrote.

So-called “clean hydrogen” is created by separating the gas from water, an extremely energy-intensive process that environmentalists worry could cancel out the greenhouse-gas saving benefits of the new method.

A draft of the Treasury rules requires projects that receive tax credits to get their energy from wind, solar or other green energy sources, Bloomberg reported. That means that significantly fewer projects would qualify for the credits.

Manchin has fought the Biden administration before on other aspects of the IRA, which he helped pass. Namely, on electric vehicle subsidies and implementation of fossil fuel regulations.