US Treasury’s Proposal and Industry Concerns

The US Treasury Department’s current proposal for tax credits on hydrogen projects has sparked concerns among companies in the clean hydrogen production sector. This proposal, integral to the Clean Hydrogen Production or 45V credit, offers substantial incentives—up to USD 3 per kg for a decade. However, the requirement to prove the use of clean electricity sourced locally and concurrent with hydrogen production is seen as a potential barrier to the industry’s growth. Companies argue that these strict criteria might hinder the development of new hydrogen projects, limiting the sector’s expansion.

Calls for Flexibility in Environmental Requirements

Specific cases, like the one presented by Australian green energy firm Fortescue, illustrate the challenges posed by the Treasury’s proposed rules. Fortescue’s project in the Pacific Northwest, aiming to utilize a blend of surplus hydropower and renewable energy, would not qualify for the tax credit under the current guidelines. This has led to a push from industry groups, such as the Fuel Cell and Hydrogen Energy Association, for exemptions, especially for projects initiated before the finalization of these guidelines.

Support for Rigorous Regulations

On the other side of the debate, some industry experts advocate for maintaining strict regulations. They argue that lenient rules under section 45V could undermine the Biden Administration’s climate objectives and the hydrogen industry’s credibility. Claire Behar, COO of US-based Hy Stor, emphasized the importance of stringent regulations to achieve both environmental goals and industry integrity.

Schlumberger’s Strategic Investment in Carbon Capture

Acquisition of Aker Carbon Capture

In a significant move, Schlumberger, a global energy multinational, announced its agreement to acquire an 80% stake in Norway’s Aker Carbon Capture. This strategic acquisition, valued at NOK 4.12 billion (approximately USD 400 million), with potential additional payments of up to NOK 1.36 billion over the next three years, aims to merge business operations and bolster efforts in large-scale industrial decarbonization.

Closing and Potential Collaborations

Pending regulatory approvals, this transaction is expected to conclude by the end of the second quarter of 2024. This move is a part of Schlumberger’s broader strategy to address climate change through innovative technology and collaboration. Aker Carbon Capture has already shown potential for significant partnerships, evidenced by its Memorandum of Understanding (MoU) with Saudi Aramco, signed in July. This MoU aims to explore opportunities in carbon capture, utilization, and storage (CCUS) in Saudi Arabia, reflecting the growing importance of collaborative efforts in global decarbonization initiatives.