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Don't Let Me Be Misunderstood - Hydrogen's Colors Hog the Spotlight, but Tax Credit Puts Focus on Carbon Intensity

Clean hydrogen’s supporters often tout its growth potential, boosted in no small way by the billions of dollars in federal subsidies that will soon go toward supporting the buildout of an extensive series of regional hubs across the U.S. Clean hydrogen has its share of detractors, too, who question how much of a fixture it can become in the U.S. energy mix and wonder about its reliance on all those federal subsidies. But there’s one thing just about everyone seems to agree on — nobody likes the seemingly ubiquitous hydrogen color scheme, with arguments that it is too simplistic, has become too politicized, and puts the industry’s focus on the wrong things. In today’s RBN blog, we look at the limitations of the hydrogen color scheme, the risks of relying on it too extensively, and how the new tax credit for clean hydrogen puts the focus on carbon intensity (CI) instead.

We’ve written a lot about hydrogen’s emergence over the past couple of years, from our initial series where we tried to make sense of the increased buzz around the fuel, to our dive into the long history of U.S. hydrogen markets, to our review of the different hydrogen production pathways, to an examination of its long-term growth potential and the development of several regional hubs in the U.S. In addition to the long-established hydrogen markets, hydrogen advocates like to tout its long-term potential for any number of uses, including as fuel to help decarbonize boilers in industrial processes, as a transportation fuel, and as an energy storage system for intermittent renewable power.

Hydrogen also gets attention because it can be produced in several different ways from a number of different fuels, including coal, natural gas, nuclear power and renewables. But while the hydrogen that is ultimately produced by each method is identical — hydrogen is hydrogen, after all — each method has its own environmental impact and its own CI score. To differentiate one type of hydrogen from another, which has become increasingly important in recent years as policies emerge to reduce or eliminate greenhouse gas (GHG) emissions, a color scheme has emerged (see Figure 1 below). While at best the scheme is far from perfect, it’s worth at least reviewing the rainbow of varieties.

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