Biden Finally Picks A Side In The Big Clean Energy Fight Dividing Democrats

The administration's strict rules for "green" hydrogen boost some clean power, like geothermal energy, but deal a blow to nuclear.

The Biden administration sided with Senate climate hawks in one of the highest-stakes debates over the future of U.S. efforts to cut planet-heating emissions, announcing its long-awaited proposal on Friday for strict rules on production of the hydrogen fuel the federal government is betting on to replace natural gas and oil.

When burned, the only byproduct from hydrogen is water. But nearly all the hydrogen on the market today is made with natural gas through a chemical process that leaves behind climate-changing pollution. Another method of making hydrogen by zapping water with electricity costs more and generates less. But if that power comes from a zero-carbon source, the resulting fuel is considered among the best emissions-free alternatives to jet fuel, diesel and coal in steelmaking.

To bring down the cost of clean hydrogen, the landmark climate-spending law President Joe Biden signed last year, the Inflation Reduction Act, earmarked hundreds of millions of dollars for companies that generate the fuel using clean electricity to claim as write-offs on federal tax bills.

But debate has raged since ― both among Democrats who wrote the legislation, and within the industries that want to make money off clean hydrogen ― over how the government should decide whether electricity is clean. No money can go out until the question is settled. On the Friday morning before Christmas, the Treasury Department provided its answer in a lengthy proposal now subject to 60 days of public comment.

It’s about much more than just hydrogen.