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Fortescue, Woodside hydrogen hopes in doubt after US rule change

Billions of dollars of hydrogen projects by Australian companies including Woodside and Fortescue may be in doubt after the US proposed rule changes that could exclude them from its Inflation Reduction Act cash.
But under the Biden administration’s new restrictions on accessing incentives of up to $US3 a kilogram for hydrogen production under the IRA, projects will need to use a source of clean electricity that is “incremental” to existing generation such as from new renewable energy plants.
Under the approach being proposed by Biden administration officials, the electricity source must be located in the same power grid region as the hydrogen project and operated at the same time.
Without each of these three requirements, there is a strong likelihood that hydrogen production would result in increased grid emissions and would exceed the maximum emissions intensity permitted to qualify for the credit,” the White House said in a statement late last month.
Fortescue has yet to confirm whether its $US550 million ($817.9 million) Phoenix Hydrogen Hub project in Arizona, which the board signed off in November, would fully qualify for the subsidies. However, that 80-megawatt project to produce up to 11,000 tonnes a year of liquid green hydrogen would use new sources of wind and solar generation, Fortescue said then, signalling it should at least meet the first criteria of the new rules