The nation’s fleet of nuclear reactors won’t be able to tap into a climate law tax credit poised to provide billions of dollars to spur the production of clean hydrogen, dealing a blow to operators struggling in the face of competition from cheap natural gas and renewables.
(Bloomberg) — The nation’s fleet of nuclear reactors won’t be able to tap into a climate law tax credit poised to provide billions of dollars to spur the production of clean hydrogen, dealing a blow to operators struggling in the face of competition from cheap natural gas and renewables.
While a carve-out for the nuclear industry could be added in the future, the initial proposed rules made public by the US Treasury Department on Friday only allow hydrogen projects powered by clean energy sources brought online in the last three years to qualify for a tax credit of as much as $3-per-kilogram. That’s bad news for nuclear operators such as Constellation Energy Corp., which has a nearly $1 billion plan to produce hydrogen from nuclear power and has lobbied the Biden administration to allow the power source to count in the lucrative tax credit.
THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O’Connor, Gabriel Friedman, Victoria Wells and others.
- Daily content from Financial Times, the world’s leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
SUBSCRIBE TO UNLOCK MORE ARTICLES
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O’Connor, Gabriel Friedman, Victoria Wells and others.
- Daily content from Financial Times, the world’s leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
REGISTER TO UNLOCK MORE ARTICLES
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the conversation in the comments.
- Enjoy additional articles per month.
- Get email updates from your favourite authors.
Article content
Article content
“The proposed rule flies in the face of Congress’ clear intent to use America’s nuclear energy to produce hydrogen,” Constellation said in a statement. “If finalized, America will surrender hydrogen and deep decarbonization leadership to China and Europe, both of which have policies that smartly utilize their existing nuclear plants to make hydrogen and speed decarbonization.”
Shares of Constellation fell 1.9% as of 10:42 a.m. in New York trading.
Read More: Hydrogen Subsidy Worth Billions Includes Strict Green Rules
Nuclear backers also noted that three out of seven so-called hydrogen hubs, which received a collective $7 billion from the Biden administration in October, would be at least partially powered by nuclear energy from project partners including Exelon Corp., Xcel Energy Inc. and Constellation.
Senior administration officials told reporters Thursday that an exception for nuclear power to receive the credits is being considered for when the rules are finalized, but they needed more information first. Among the ideas: allow upgraded or relicensed plants to count, or a requirement that utilities document how producing hydrogen would help them avoid shutting plants.
The Treasury Department will accept public comment for 60 days and could make changes before finalizing the plan.
Article content