EPA to Remove Hydrogen from Power Plant Rule, Sources Say

The U.S. Environmental Protection Agency (EPA) is planning to exclude hydrogen from its final rule to limit power plant pollution, according to sources familiar with the matter. The decision comes amid industry pushback and legal uncertainties surrounding the use of hydrogen as a best system of emission reduction (BSER) for gas power plants.

The clean hydrogen industry, still in its early stages, has been a focus of the Biden administration's efforts to achieve net-zero emissions by 2050. The administration is investing billions of dollars to establish a national network of low or no carbon hydrogen production. However, the Treasury Department's strict guidance on the kinds of hydrogen eligible for new tax credits has raised concerns about potentially hindering the nascent industry.

Environmentalists have also expressed reservations about using hydrogen as a BSER for gas power plants. They argue that the EPA's move to set criteria for green hydrogen might extend the rule beyond individual power stations to include upstream emissions from hydrogen production, which could render the regulation legally vulnerable.

While the removal of hydrogen is not expected to weaken the overall power plant rule, it remains unclear what technology will replace it to underpin the EPA's final standard for new intermediate gas plants. Carbon capture is now seen as the only option for gas plants to reduce emissions and meet the regulation, a setback for the hydrogen industry that had hoped to be included as a compliance option.

Why this matters: The EPA's decision to remove hydrogen from its power plant rule has significant implications for the clean energy transition and the Biden administration's climate goals. It highlights the challenges and uncertainties faced by emerging clean technologies like hydrogen in the face of industry resistance and legal hurdles. The move also underscores the need for clear and consistent policies to support the development and deployment of low-carbon solutions in the power sector.

The EPA is expected to release its final power sector climate rule on Thursday, April 24, 2024, as part of President Joe Biden's climate agenda. Sources who participated in briefings with EPA officials have revealed key details of the final rule, including extended deadlines for coal plants to start capturing their climate pollution and earlier deadlines for future gas-fired plants to install carbon capture systems.

Key Takeaways

• EPA plans to exclude hydrogen from power plant pollution rule due to industry pushback.
• Biden admin investing billions in hydrogen, but Treasury guidance raises concerns.
• Environmentalists worry EPA's hydrogen criteria could extend rule beyond power stations.
• Carbon capture seen as only option for gas plants to meet EPA's final standard.
• EPA's final power sector climate rule to have extended deadlines for coal, earlier for gas.