PowerTap Hydrogen Capital Corp. (NEO:MOVE.AQN, OTC:MOTNF) has provided an update on the US Inflation Reduction of Act (IRA) of 2022 which allows the company to expand outside California given that the legislation provides incentives at the federal level.
The 2022 IRA will result in an investment of $369 billion in energy and climate change programs and will avoid 6.3 billion tons of cumulative greenhouse gas emissions by 2030 amounting to a 40% annual emissions reduction compared to 2005 levels, the company noted.
"The IRA will allow PowerTap to expand its focus into the rest of the USA (outside of California) due to the needed attractive incentives to build hydrogen infrastructure. We are also pleased that this legislation is awarding federal incentives including tax credits to both green and blue hydrogen producers in the United States,” Raghu Kilambi, CEO of PowerTap, said in a statement.
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“While we believe in green hydrogen (electrolysis) and have several investments in the green hydrogen space, we believe that blue hydrogen is the appropriate solution for the United States for the next decade due to the high cost of electricity that is needed to produce green hydrogen,” he added.
PowerTap cited recently published analysis from global law firm Shearman and Sterling which says the critical legislation positions the USA as among the most competitive places in the world to develop green hydrogen projects across the value chain.
The company added that, according to detailed analysis provided by Recharge, the world's leading business intelligence source for the renewable energy industries, the IRA creates a tax credit that would pay PowerTap and other clean hydrogen producers up to $3 per kilogram (adjusted for inflation).
PowerTap said it intends to focus its efforts on maximizing the available tax credits closely following the criteria identified here. The size of the tax credits available to US clean hydrogen producers depends on the lifecycle greenhouse gas (GHG) emissions of each project and more importantly, on how much staff are paid, the company noted.
The tax credits come on top of California's LCFS (Low Carbon Fuel Standard) hydrogen refueling infrastructure and dispensing carbon credits.
PowerTap Hydrogen Capital, through its wholly-owned subsidiary, PowerTap Hydrogen Fueling Corp, is focused on installing hydrogen production and dispensing fueling infrastructure in the United States.
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