WEBVTT - US Hydrogen Industry at Odds Over Tax Credit Rules 0:00:00.560 --> 0:00:03.680 This is Dana Perkins and your listening to Switched on 0:00:04.120 --> 0:00:08.280 the BNAF podcast. Draft guidance for the US hydrogen Production 0:00:08.400 --> 0:00:11.959 tax Credit was introduced in December of twenty twenty three, 0:00:12.080 --> 0:00:15.360 with the aim of promoting decarbonization in hard to abate 0:00:15.400 --> 0:00:18.560 sectors and enhancing energy security in the country as well. 0:00:18.760 --> 0:00:23.040 The draft guidance requires electrolysis projects to meet additional criteria, 0:00:23.079 --> 0:00:27.320 including hourly matching between clean energy production and power consumption. 0:00:27.720 --> 0:00:30.960 While some applaud the draft guidance for preventing greenwashing and 0:00:31.080 --> 0:00:35.879 driving real decarbonization, others view these requirements as excessive in 0:00:35.920 --> 0:00:39.640 fear they could potentially discourage investment in green hydrogen production. 0:00:40.040 --> 0:00:43.080 On today's show, we bring you a discussion from bnaf's 0:00:43.120 --> 0:00:46.000 recent summit in New York, where Martin Tangler, who leads 0:00:46.040 --> 0:00:50.280 BNF's hydrogen research, spoke with Kathleen Baron, Executive vice president 0:00:50.400 --> 0:00:54.560 and chief Strategy Officer at Constellation, alongside Claire Bahar, chief 0:00:54.560 --> 0:00:58.160 commercial officer at High Store Energy, and Elena Scaltreaty, chief 0:00:58.160 --> 0:01:01.760 commercial officer at TOPSO and l. Lastly, Andy Vezy, President 0:01:01.800 --> 0:01:05.200 and chief executive officer at forties U North America. During 0:01:05.240 --> 0:01:08.360 their lively discussion of the forty five v tax credit. 0:01:08.480 --> 0:01:11.720 They considered whether a heavy focus on green hydrogen production 0:01:12.040 --> 0:01:15.800 overlooks hydrogen adoption, and they compared the US to Europe, 0:01:15.840 --> 0:01:19.040 where you do see demand side incentives. As they consider 0:01:19.120 --> 0:01:21.800 what it will take to build out a hydrogen industry 0:01:21.840 --> 0:01:24.640 in the United States, they got into which technologies are 0:01:24.680 --> 0:01:27.720 going to help them get there and the associated costs. 0:01:28.160 --> 0:01:32.199 Agendas and videos from previous b andF summits, including this one, 0:01:32.400 --> 0:01:35.600 can be found at BNF dot com under the events tab. 0:01:35.840 --> 0:01:38.320 As always, if you like this podcast, make sure to 0:01:38.360 --> 0:01:42.280 subscribe on Apple Podcasts, Spotify, or wherever you get your podcasts, 0:01:42.319 --> 0:01:44.679 and consider giving us a review to make us more 0:01:44.720 --> 0:01:48.080 discoverable by others. Right now, though, let's hear Martin's panel 0:01:48.160 --> 0:01:51.560 from the BNF summit in New York titled Controversial Shifts 0:01:51.600 --> 0:01:59.360 in America's green hydrogen Landscape. 0:02:03.000 --> 0:02:04.000 Let's jump straight in. 0:02:04.280 --> 0:02:09.240 So when President Biden signed the Inflation Reduction Act in 0:02:09.360 --> 0:02:13.320 August twenty twenty two, many in the hydrogen industry saw 0:02:13.360 --> 0:02:16.960 it as a turning point, as a real game changer. 0:02:17.000 --> 0:02:20.280 A three dollar per kilogram tax credit for anybody who 0:02:20.400 --> 0:02:24.880 can make hydrogen with very, very low carbon emissions, but 0:02:25.000 --> 0:02:28.400 almost two years later, no one has actually received a 0:02:28.400 --> 0:02:32.720 single dollar because we're waiting for guidance on how these 0:02:32.760 --> 0:02:36.920 credits can be claimed. In December, the Treasury and the 0:02:36.960 --> 0:02:41.840 IRS published a draft of this guidance, and this draft 0:02:41.919 --> 0:02:46.800 is quite controversial for including the so called three pillars 0:02:47.040 --> 0:02:54.320 of additionality, time matching, and deliverability. Most companies want leniency 0:02:54.440 --> 0:02:59.040 on these three pillars, but some are in favor. Billions 0:02:59.080 --> 0:03:00.000 of dollars. 0:02:59.680 --> 0:03:03.120 Are a stake in this debate, and everybody agrees on 0:03:03.120 --> 0:03:03.519 one thing. 0:03:04.040 --> 0:03:08.040 We need final rules as soon as possible, and this 0:03:08.080 --> 0:03:13.000 is where we get to our panelists. Claire, you've become 0:03:13.080 --> 0:03:17.680 quite famous recently for coming out in favor of these 0:03:18.120 --> 0:03:21.440 really strict rules. So I'm going to quote your recent 0:03:21.480 --> 0:03:24.160 testimony at a public hearing on March the twenty fifth, 0:03:24.440 --> 0:03:28.960 where you said high store energy urges the Treasury and 0:03:29.000 --> 0:03:33.239 the IRS to adopt the three pillars approach, requiring additionality 0:03:33.240 --> 0:03:37.080 from day one, strong deliverability standards, and a phase in 0:03:37.560 --> 0:03:40.920 of hourly matching by twenty twenty eight. First, can you 0:03:40.960 --> 0:03:43.040 explain to us what these three pillars are so we 0:03:43.400 --> 0:03:46.600 educate the audience, And second, what makes it possible for 0:03:46.680 --> 0:03:49.280 you to argue in favor of these three pillars when 0:03:50.000 --> 0:03:53.520 some of our other panelists and most of the industry 0:03:53.560 --> 0:03:55.960 seem to be in favor of some leniency. 0:03:56.560 --> 0:03:57.000 Perfect. 0:03:57.200 --> 0:03:59.680 Thank you Martin, and thank you Bin Yaf for the 0:03:59.720 --> 0:04:03.600 upper to need to speak today. I'll start with defining 0:04:03.640 --> 0:04:07.640 what the three pillars are. The three pillars are strict 0:04:07.840 --> 0:04:14.080 guidelines in relation to the guidelines. 0:04:13.360 --> 0:04:15.720 For grid connected electrilizers. 0:04:16.200 --> 0:04:19.880 And these guidelines are to ensure that there is robust 0:04:19.920 --> 0:04:24.919 accounting for the carbon emissions associated with grid connected electrilizers. 0:04:25.360 --> 0:04:28.720 And so, starting with additionality, it's a requirement that new 0:04:30.560 --> 0:04:36.880 new green electrons are powering the electrilizers. For regionality, this 0:04:37.000 --> 0:04:41.479 is to ensure that the clean hydrogen production is in 0:04:41.520 --> 0:04:47.279 the same location as the clean electricity that's powering them. 0:04:47.560 --> 0:04:52.599 And this is to ensure that you're not claiming green 0:04:53.240 --> 0:04:57.240 electrons in West Texas, for example. Are then correlating to 0:04:57.320 --> 0:05:00.360 your project, your hydrogen project in the new work. 0:05:00.680 --> 0:05:02.200 And then lastly is time matching. 0:05:02.240 --> 0:05:05.400 That's to ensure that the clean electricity is being produced 0:05:05.400 --> 0:05:09.480 at the same time as the green hydrogen production. So 0:05:10.120 --> 0:05:13.240 the guidelines have a transition periods similar to that of 0:05:13.320 --> 0:05:18.520 the EU that allow for an annual matching until twenty 0:05:18.640 --> 0:05:22.520 twenty eight, and then from then on it's an hourly matching. 0:05:23.120 --> 0:05:26.200 And the reason why these three pillars are so important, 0:05:26.360 --> 0:05:30.200 it's to ensure that we're investing in long term infrastructure 0:05:30.720 --> 0:05:36.280 that are decreasing emissions instead of in fact increasing emissions. 0:05:36.279 --> 0:05:41.120 And unfortunately, today our electric grid is still predominantly fossil 0:05:41.120 --> 0:05:45.039 fuel based sixty seventy, as high as eighty percent in 0:05:45.040 --> 0:05:46.440 some locations. 0:05:46.320 --> 0:05:49.960 And so if you are putting on a large. 0:05:51.080 --> 0:05:56.479 Load and you're not then adding more renewable electricity such 0:05:56.520 --> 0:06:00.719 as wind or solar, you are in fact increasing the 0:06:00.760 --> 0:06:04.240 demand for fossil fuels that would be backfilled by peakers 0:06:04.279 --> 0:06:08.600 that are coal and natural gas and so high store energy. 0:06:09.320 --> 0:06:12.000 You know, really applauds the Treasury. 0:06:11.600 --> 0:06:14.920 For taking this stance and ensuring that the three pillars 0:06:14.960 --> 0:06:20.039 are upheld. And from our perspective, our project prior to 0:06:20.080 --> 0:06:23.600 the guidelines is going to be three pillar compliant from 0:06:23.680 --> 0:06:28.400 day one. And our first project is the Mississipi Clean 0:06:28.480 --> 0:06:33.040 Hydrogen Hub, which couples on site, off grid dedicated renewables 0:06:33.320 --> 0:06:38.120 for our electrolysis production and salt cavern storage CO located 0:06:38.520 --> 0:06:42.520 and storage gives us the ability to store access hydrogen 0:06:43.000 --> 0:06:48.159 and then it is dispatchable on demand four times when. 0:06:48.040 --> 0:06:50.720 The wind isn't blowing and the sun isn't shining. 0:06:51.279 --> 0:06:58.360 And you know, holistically, we're in this business to decarbonize 0:06:58.680 --> 0:07:04.400 and it's not about just having another another molecule. We say, 0:07:04.480 --> 0:07:08.919 if you're going to burn natural gas, burnatural gas, don't. 0:07:08.800 --> 0:07:12.880 Go through all the loops, okay to get there. 0:07:13.160 --> 0:07:17.240 So it's a combination of those off gride renewables as 0:07:17.240 --> 0:07:19.679 opposed to on grid, which I think that's that's relatively 0:07:19.720 --> 0:07:22.280 easy to understand. You managed to save some costs by 0:07:22.320 --> 0:07:25.000 not paying some of the expensive grid fees, and then 0:07:25.000 --> 0:07:28.880 those that salt cavern storage, right, and the salt caverns 0:07:28.960 --> 0:07:31.800 is to me that that's a really really key factor 0:07:31.880 --> 0:07:33.560 of the projects that you're building. 0:07:34.200 --> 0:07:35.360 And salt caverns. 0:07:35.000 --> 0:07:38.000 Are quite quite rare, right, You don't get to build 0:07:38.040 --> 0:07:39.960 salt caverns just just anywhere. I don't think you could 0:07:39.960 --> 0:07:41.800 build a salt cabon Europe because we're not sitting on 0:07:41.840 --> 0:07:45.040 a salt deposit right now. So would you consider building 0:07:45.080 --> 0:07:48.200 projects if you didn't have salt caverns? 0:07:49.200 --> 0:07:52.520 Well, So the salt cavern storage is really key for 0:07:52.600 --> 0:07:57.240 both the scale and the duration. It's that long duration, 0:07:57.360 --> 0:08:01.680 that multi day, multi week and seasonal energy storage that 0:08:01.720 --> 0:08:05.200 we're prioritizing in the off take markets we're looking at, 0:08:05.240 --> 0:08:09.480 which are the energy intensive industries where direct electrification is 0:08:09.800 --> 0:08:13.040 not a viable option. And it's these off take markets, 0:08:13.120 --> 0:08:17.560 for example, steel, that are the first movers that are 0:08:17.600 --> 0:08:22.160 already there with their customers showing the green premium that they. 0:08:22.000 --> 0:08:23.920 Want a zero carbon solution. 0:08:24.240 --> 0:08:29.120 And from the commercial point of view, this transparency in 0:08:29.160 --> 0:08:33.280 carbon emissions is exactly what our customers are asking for to. 0:08:33.480 --> 0:08:34.880 Ensure that they can. 0:08:36.400 --> 0:08:39.840 Account for their scope one, two and three emissions and 0:08:39.960 --> 0:08:43.480 most importantly that the products they're producing today in the 0:08:43.559 --> 0:08:48.000 United States with clean hydrogen is competitive and accepted on 0:08:48.559 --> 0:08:49.560 a global scale. 0:08:49.679 --> 0:08:52.240 Okay, so customers wanted one final one before we get 0:08:52.240 --> 0:08:54.720 to Andy, who I sure, I'm sure has very different, 0:08:54.920 --> 0:08:57.560 very different view on this. So would your position be different, 0:08:57.640 --> 0:09:01.240 Claire if your project was not based on top of 0:09:01.280 --> 0:09:04.680 salt caverns, which you'd be also asking for some leniency There. 0:09:05.280 --> 0:09:10.440 No, because leniency with the market in such infancy, there 0:09:10.520 --> 0:09:16.520 is urgency, but we cannot be sacrificing urgency with investing 0:09:17.000 --> 0:09:21.240 in infrastructure that's going to continue to lock in fossil fuels. 0:09:21.280 --> 0:09:23.320 The goal is decarbonization and. 0:09:23.240 --> 0:09:27.360 To transition off of fossil fuels and hydrogen is an 0:09:27.400 --> 0:09:31.960 excellent solution because it provides that molecule that can be 0:09:32.000 --> 0:09:36.200 stored and transported over long distances, and we need to 0:09:36.240 --> 0:09:40.000 be prioritizing it in the areas of the economy where 0:09:40.360 --> 0:09:44.959 direct electrification is not a viable option, and not trying 0:09:45.000 --> 0:09:47.760 to have it spread thin, wide and thin. 0:09:48.160 --> 0:09:49.359 It needs to be concentrated. 0:09:50.080 --> 0:09:51.000 Okay, good to know. 0:09:51.160 --> 0:09:53.559 So no leniency even if you don't have if you 0:09:53.600 --> 0:09:54.720 didn't have salt caverns. 0:09:55.080 --> 0:09:55.360 Okay. 0:09:55.360 --> 0:09:58.440 I wonder what Andy has to say, because Andy, you 0:09:58.640 --> 0:10:02.160 are one of the strongest, is asking for those more 0:10:02.280 --> 0:10:06.720 lenient rules in your testimony in that same hearing where 0:10:06.760 --> 0:10:10.840 Claire was speaking in March, you said, I'm quoting forty 0:10:10.880 --> 0:10:14.000 five V in its current form is a strait jacket 0:10:14.679 --> 0:10:18.160 on the energy on the emerging industry. The only solution 0:10:18.360 --> 0:10:24.160 is to add a minimum include grandfathering first mover projects. 0:10:24.880 --> 0:10:26.920 First, can you explain what grandfathering means? 0:10:27.120 --> 0:10:29.360 And then second, why do you feel this way if 0:10:29.400 --> 0:10:33.200 Claire says that she can make her projects work even 0:10:33.480 --> 0:10:34.520 with those strict rules. 0:10:34.720 --> 0:10:34.960 Yeah. 0:10:35.320 --> 0:10:37.360 Sure, And first of all, let me say that I 0:10:37.400 --> 0:10:42.920 hope everybody's sitting in this panel is wildly successful because 0:10:42.600 --> 0:10:49.040 because we need very low carbon hydrogen, right, we need 0:10:49.080 --> 0:10:52.040 it as soon as possible, but we needed to have 0:10:52.120 --> 0:10:55.400 it at the lowest possible cost, right. I think there's 0:10:55.440 --> 0:10:58.760 a lot in here to unpack. And you know, I 0:10:58.760 --> 0:11:00.920 think we've talked before. I said that you know where 0:11:00.920 --> 0:11:04.880 you stand on this issue starts with where you sit, right, 0:11:05.360 --> 0:11:07.439 And if I was sitting in a similar position, then 0:11:07.440 --> 0:11:10.120 I could basically say, Yep, I'm supportive of these things 0:11:10.120 --> 0:11:12.559 because I know why seventy five percent of the industry 0:11:12.600 --> 0:11:14.600 can't compete with me because I can't do it and 0:11:14.640 --> 0:11:17.720 it's all price. So I think that's great. But here's 0:11:17.720 --> 0:11:19.719 the deal. We're not doing projects here. We're trying to 0:11:19.720 --> 0:11:23.200 build an industry. We're trying to build an industry, and 0:11:23.240 --> 0:11:26.200 the key in building the industry is driving the cost 0:11:26.440 --> 0:11:30.480 of every molecule down. I always get challenged, well, nobody 0:11:30.520 --> 0:11:33.680 wants to buy green hydrogen. No, nobody wants to pay 0:11:33.720 --> 0:11:36.120 the price. But if I could sell that green molecule 0:11:36.120 --> 0:11:39.920 at the same price as grey. Everybody would buy green hydrogen. 0:11:39.920 --> 0:11:42.520 We'd all be happy as heck. Right, So how do 0:11:42.559 --> 0:11:46.559 you get there? Well, the Body Administration in the Inflation 0:11:46.640 --> 0:11:49.920 Reduction Act anticipated driving the cost of that molecule down 0:11:50.080 --> 0:11:52.959 by twenty thirty to a dollar a kilogram. 0:11:53.280 --> 0:11:56.080 And this was really to incent and get this started. Right, 0:11:56.640 --> 0:11:58.400 And why is it so important that we have as 0:11:58.440 --> 0:11:59.600 many projects going now? 0:11:59.640 --> 0:12:02.040 Include I mean the early ones that don't meet the 0:12:02.080 --> 0:12:05.400 three pillars or one of the three pillars, because almost 0:12:05.440 --> 0:12:07.719 all of them can meet one, which is deliverability. 0:12:07.720 --> 0:12:10.240 I can't find too many that don't. Right. Why is 0:12:10.280 --> 0:12:10.960 it so important? 0:12:10.960 --> 0:12:13.199 Because the more you do, the more projects that go, 0:12:13.480 --> 0:12:16.360 the ones that are successful, the ones that fail. You're 0:12:16.360 --> 0:12:19.880 building economies of scale, economies of manufacture to bring down 0:12:19.920 --> 0:12:22.640 your costs, and economies of novels. You get smarter about 0:12:22.679 --> 0:12:25.760 how to do it. You got to drive that engine. 0:12:25.360 --> 0:12:27.320 To be successful. And here's the deal. 0:12:27.720 --> 0:12:31.280 If we made the same requirements from this industry to 0:12:31.320 --> 0:12:33.480 have to bring its own green electrons to the party, 0:12:33.720 --> 0:12:36.440 and we made that apply to everybody who was making 0:12:36.480 --> 0:12:39.320 electric vehicles, I would not be driving my electric vehicle today. 0:12:39.760 --> 0:12:42.560 Why this one. Right. And here's the other issue. We're 0:12:42.559 --> 0:12:43.440 trying to solve too. 0:12:43.280 --> 0:12:48.199 Many problems with one piece of rulemaking. Right, there are 0:12:48.400 --> 0:12:52.160 two point six tero watts of renewable standing in queues. 0:12:52.640 --> 0:12:56.240 That's twice the installed total capacity. Now we're going to 0:12:56.320 --> 0:12:59.880 require even more pressure to push through that houses in 0:13:00.000 --> 0:13:02.920 the industry going to start. Yes, I'm very happy that 0:13:03.000 --> 0:13:04.800 high store is going to have a project. 0:13:04.480 --> 0:13:06.720 I really am. But that's not going to build an industry. 0:13:07.320 --> 0:13:11.840 You have to open and broaden that aperture, right, and 0:13:11.880 --> 0:13:13.280 then it will close over time. 0:13:13.640 --> 0:13:14.920 We're not advocating that. 0:13:14.840 --> 0:13:17.280 We people don't pay attention to the three pillars because 0:13:17.280 --> 0:13:20.280 they are critically important. Right, you said it. We have 0:13:20.400 --> 0:13:23.680 no totally green grids, right, we have done right. The 0:13:23.720 --> 0:13:26.080 other thing we don't have is we don't have enough 0:13:26.160 --> 0:13:29.480 green electrons. We have to sort that in time. But 0:13:29.520 --> 0:13:32.439 we're saying that for projects that can get into construction 0:13:32.559 --> 0:13:35.640 by twenty twenty eight, they should be grand funds so 0:13:35.720 --> 0:13:36.840 we get them going. 0:13:37.200 --> 0:13:37.480 Right. 0:13:37.760 --> 0:13:39.960 And one other issue which no one talks about outside 0:13:40.000 --> 0:13:42.600 the Three Pillars is the creep model. So every year 0:13:42.640 --> 0:13:45.880 you have to reevaluate the credits you're getting what they're worth. 0:13:45.960 --> 0:13:48.800 Who can finance a project that way. So there's a 0:13:48.800 --> 0:13:49.840 lot of work to be done. 0:13:49.840 --> 0:13:53.680 But here's the deal. Every effort, every effort is good. 0:13:53.920 --> 0:13:56.679 Let's widen the aperture, let's not restrict it right off 0:13:56.720 --> 0:13:58.800 the bat. So we have a few projects because here's 0:13:58.800 --> 0:14:01.240 what forty five in its purest form will do. 0:14:02.000 --> 0:14:03.600 It will make the plant smaller. 0:14:03.960 --> 0:14:05.559 All right, you can ask me why, but I'm not 0:14:05.559 --> 0:14:06.080 going to explain. 0:14:06.120 --> 0:14:06.320 Now. 0:14:06.400 --> 0:14:10.320 Smaller, there will be fewer of them, and they will 0:14:10.400 --> 0:14:13.000 cost more. Estimates right now is that projects will increase 0:14:13.040 --> 0:14:16.040 in cost between one hundred and forty one seventy five percent. 0:14:15.760 --> 0:14:16.640 To the end consumer. 0:14:17.040 --> 0:14:19.920 How are you going to build demand that is ensuring 0:14:20.400 --> 0:14:25.120 absolutely ensuring that high carbon intensity hydrogen. 0:14:24.720 --> 0:14:28.280 Comes into this market. So let me stop there and. 0:14:29.200 --> 0:14:29.640 I get it. 0:14:29.720 --> 0:14:34.960 So, more expensive hydrogen, fewer projects, smaller projects. So you 0:14:35.080 --> 0:14:39.120 said your position, You know you stand where you sit. 0:14:40.080 --> 0:14:43.720 Why don't you or why doesn't Fortescue sit on top 0:14:43.760 --> 0:14:44.760 of salt caverns? 0:14:45.080 --> 0:14:47.520 Well, I'll tell you where we do so. Well, first 0:14:47.560 --> 0:14:49.840 of all, look, I think you said it right. They're 0:14:49.960 --> 0:14:53.000 very few and it's not all salt, it's domo salt. 0:14:53.120 --> 0:14:54.720 And if you look at a map. There are only 0:14:54.760 --> 0:14:57.720 so many, right, it's a scarce resource. But if you'd 0:14:57.720 --> 0:15:00.600 ask me where Fordescue sits, it sits on planet Earth. Yeah, 0:15:00.640 --> 0:15:04.040 we all do, right, we all do, and therefore get 0:15:04.200 --> 0:15:07.920 to decarbonization with a molecule for people who can't use 0:15:07.920 --> 0:15:12.000 an electron should be in all our best interests. Widening 0:15:12.040 --> 0:15:16.880 the amperture, right, doesn't impact I store. Right, you call 0:15:16.920 --> 0:15:20.880 it lenient, or you called it lenient, that's a judgment already. 0:15:21.160 --> 0:15:22.320 I call it appropriate. 0:15:22.840 --> 0:15:25.920 Right, So let's build an industry here, and let's not 0:15:26.080 --> 0:15:29.360 try to solve every problem with one piece of rulemaking 0:15:29.600 --> 0:15:32.280 today when we're really building an industry for the twenty 0:15:32.360 --> 0:15:34.160 thirties and twenty forties. 0:15:33.920 --> 0:15:36.600 Right, I call it more lenient, not linient. Andy. 0:15:37.960 --> 0:15:40.920 One final for you before we move on to Elena 0:15:40.960 --> 0:15:44.640 and Kathleen. So both you and Claire, this is really interesting. 0:15:44.640 --> 0:15:48.120 Both you and Claire are members of GH two, which 0:15:48.160 --> 0:15:52.040 is one of the strictest hydrogen standards before you have 0:15:52.120 --> 0:15:55.320 to produce your hydrogen at one kilogram of CO two 0:15:55.920 --> 0:15:59.480 or less per kilogram of hydrogen that you make. Your CEO, 0:15:59.600 --> 0:16:03.960 Andrew Forest is on the board of the GH two organization. 0:16:04.560 --> 0:16:08.640 So isn't your dislike of the hourly matching pillar at 0:16:08.720 --> 0:16:11.280 odds with your membership of the GH two. 0:16:11.960 --> 0:16:14.360 No, I don't think so, because it doesn't actually specify 0:16:14.400 --> 0:16:17.520 hourly matching, monthly matching, or annually matching. What it does 0:16:17.560 --> 0:16:19.400 requires we follow the rules and laws that are in 0:16:19.440 --> 0:16:20.840 place that it does. 0:16:21.600 --> 0:16:21.800 Look. 0:16:21.960 --> 0:16:25.000 I think for FORDESCU, we have an absolute commitment that 0:16:25.040 --> 0:16:27.320 we will never leave anything worse offt than when we come, 0:16:27.360 --> 0:16:30.360 whether it's a water aquifer, the community in terms of 0:16:30.400 --> 0:16:34.400 what we're doing, or that we will directly impact in 0:16:34.480 --> 0:16:36.200 higher emissions of CO two. 0:16:36.360 --> 0:16:36.760 We have a. 0:16:36.720 --> 0:16:40.120 Project in Washington State, in Washington State, they manage that 0:16:40.920 --> 0:16:45.240 in Washington State. It's hydro power in Washington State. That 0:16:45.320 --> 0:16:49.160 project would not meet this requirement, and it's a perfectly 0:16:49.320 --> 0:16:50.520 good project. 0:16:51.320 --> 0:16:52.640 This is what we have to sort out. 0:16:52.800 --> 0:16:55.000 There's nothing There are a few pieces in conflict here, 0:16:55.000 --> 0:16:57.240 but what's non in conflict for anybody on this stage 0:16:57.640 --> 0:17:00.000 is the urgency by which we have to produce those 0:17:00.280 --> 0:17:03.480 very low carbon intensity molecules. 0:17:03.680 --> 0:17:04.840 So let's get at it. 0:17:05.080 --> 0:17:07.119 Let's make it so people can come to this game 0:17:07.359 --> 0:17:10.040 and we can learn, we can build, we can manufacture. 0:17:10.040 --> 0:17:11.040 And here's the other piece of it. 0:17:11.200 --> 0:17:14.080 If we're increasing the cost of these projects, what's a 0:17:14.119 --> 0:17:16.200 project developed going to do. You're gonna buy the cheapest 0:17:16.359 --> 0:17:18.200 electualized as you can know where they're. 0:17:18.000 --> 0:17:20.440 Made China, tie them. 0:17:20.560 --> 0:17:22.359 And the whole purpose of this bill was to build 0:17:22.400 --> 0:17:24.680 infrastructure in this country. 0:17:25.000 --> 0:17:26.840 We have a report on electronizing in China. They're not 0:17:26.840 --> 0:17:28.560 gonna have it as easy as it seems. 0:17:28.560 --> 0:17:31.160 Even let me tell you, they'll have it easier when 0:17:31.200 --> 0:17:34.400 everybody's buying them, because they have to get those costs. 0:17:34.040 --> 0:17:37.400 Down here to manage the cost of that molecule. All right. 0:17:37.440 --> 0:17:40.919 And here's the other thing. Fortescue is a large public 0:17:40.920 --> 0:17:43.639 company in Australia. We're in thirty different countries and I 0:17:43.760 --> 0:17:45.520 have to go before Andrew Farst and tell them why 0:17:45.520 --> 0:17:47.359 I think he should put a dollar of his money 0:17:47.560 --> 0:17:55.040 here versus Morocco, versus Egypt, versus Norway. Right, So, think 0:17:55.040 --> 0:17:56.880 about where capital is going to go, where the capital 0:17:56.960 --> 0:17:58.720 flows are going to go. And one other aspect of 0:17:58.760 --> 0:18:02.119 this and the Inflation Reduction Act was the creation of 0:18:02.160 --> 0:18:06.879 an industry having capital invested here. So these are the 0:18:06.880 --> 0:18:08.720 things why we're concerned about and why we might have 0:18:08.760 --> 0:18:11.359 a slightly different view on this than. 0:18:11.359 --> 0:18:14.680 High stool good. 0:18:14.720 --> 0:18:17.520 Good to know that your membership of the G two 0:18:17.560 --> 0:18:22.960 standard is not at odds with your arguments for leniency 0:18:23.000 --> 0:18:26.160 or more leniency on these rules. 0:18:26.520 --> 0:18:29.400 Moving on to Elena, So Elena. 0:18:30.400 --> 0:18:35.600 Many green hydrogen proponents say that the proposed guidance, the 0:18:35.800 --> 0:18:41.320 strict guidance, benefits blue hydrogen by being too strict on 0:18:41.400 --> 0:18:45.159 green and therefore constraining green hydrogen and making blue the 0:18:45.240 --> 0:18:48.560 default technology to go to. And your company, top so So 0:18:49.680 --> 0:18:54.000 licenses a blue hydrogen technology called sincore to firms like 0:18:54.080 --> 0:18:58.760 Exxon and Fidelis. But your client, Exxon is now threatening 0:18:58.800 --> 0:19:02.680 to ditch a blue hydrogen project that would use your 0:19:02.720 --> 0:19:06.400 technology because the rules would make it hard for them 0:19:06.400 --> 0:19:10.080 to qualify for the clean Hydrogen credit and they would 0:19:10.119 --> 0:19:12.320 have to settle for a lower credit, the forty five 0:19:12.520 --> 0:19:14.960 Q credit for carbon. 0:19:14.640 --> 0:19:17.119 Capture and storage. So what is your view? 0:19:17.359 --> 0:19:21.720 Does the current guidance on green hydrogen help blue hydrogen 0:19:21.720 --> 0:19:24.840 by constraining green or does it hurt blue hydrogen because 0:19:24.960 --> 0:19:28.000 it doesn't get those doesn't allow them to get those credits. 0:19:28.440 --> 0:19:32.880 So thank you and really pleased to be here. Let 0:19:32.920 --> 0:19:36.560 me start by saying that at TOPS we have the 0:19:36.640 --> 0:19:41.680 beauty of having a number of technologies that actually speak 0:19:41.720 --> 0:19:45.200 to all colors, and for that, we are color agnostic 0:19:45.320 --> 0:19:48.400 when it comes to hydrogen. So in fact, we tend 0:19:48.440 --> 0:19:51.960 to talk about low carbon hydrogen and renewable hydrogen. 0:19:52.400 --> 0:19:54.080 And when you look at our. 0:19:54.000 --> 0:19:57.520 Portfolio of technologies, it's true we have blue with our sinker, 0:19:57.640 --> 0:20:02.440 which is fully commercial and fully scaled technology, but we 0:20:02.560 --> 0:20:07.520 are making huge investments for our size of company in 0:20:07.600 --> 0:20:11.600 green with the electoralizer, the sec electoralizer, So we are 0:20:11.640 --> 0:20:15.920 really invested in both technologies and in many more because 0:20:15.960 --> 0:20:18.960 we are as well in renewable fuels. So as a 0:20:19.040 --> 0:20:23.600 matter of fact, we are quite agnostic. And as and said, 0:20:23.720 --> 0:20:26.879 we are all for the carbonization in whatever form and 0:20:26.960 --> 0:20:30.200 shape it takes place, as long as it takes place 0:20:30.520 --> 0:20:34.320 fast enough that we can commit and actually get to 0:20:34.400 --> 0:20:39.679 our twenty to fifty targets. So I think everybody that 0:20:39.760 --> 0:20:44.159 talks about forty five V at the moment is unhappy, whether. 0:20:43.960 --> 0:20:45.040 It's green or blue. 0:20:45.440 --> 0:20:50.320 So in any shade of color, when we think of green, 0:20:50.359 --> 0:20:53.080 and we think of our own investments and the customers 0:20:53.119 --> 0:20:56.560 we talk to, there is certainly a concern about availability 0:20:56.800 --> 0:21:02.280 of fitstocks to actually scale the technology, tests, the technology 0:21:02.440 --> 0:21:04.880 make it making sure that it comes you know, at 0:21:04.920 --> 0:21:07.919 the right cost, in the right amount of time. But 0:21:07.960 --> 0:21:11.040 also when we speak to our customers in the low 0:21:11.119 --> 0:21:15.760 carbon hydrogen and low carbon ammonia for that or blue 0:21:16.000 --> 0:21:19.600 hydrogen and ammonia, they do have concerns that actually, as 0:21:19.640 --> 0:21:23.040 it is shaped at the moment, the forty five V 0:21:23.800 --> 0:21:28.720 doesn't really favor decarbonization. Why because actually it sets a 0:21:28.800 --> 0:21:33.320 standard which is for the calculation of the carbon intensity 0:21:33.400 --> 0:21:37.080 based on the carbon intensity of the fitstocks, which are 0:21:37.160 --> 0:21:41.639 based on historical heverages, So actually not favoring projects and 0:21:41.680 --> 0:21:47.320 those and those project developers that want to be more 0:21:47.359 --> 0:21:51.800 ambitious that actually want to make investment towards decarbonizing the 0:21:51.840 --> 0:21:56.880 whole value chain methane emissions and also being more ambitious 0:21:56.920 --> 0:21:59.959 on the carbon capture on the process of hydrogen production, 0:22:00.640 --> 0:22:04.080 hence actually failing a bit the whole purpose and the 0:22:04.080 --> 0:22:08.520 philosophy of the i RA and the forty five V specifically. 0:22:09.119 --> 0:22:13.600 So if we have advice accordingly, we would actually advise 0:22:13.760 --> 0:22:17.800 changes both with regards to green hydrogen and to low 0:22:17.840 --> 0:22:21.919 carbon hydrogen, and just with the purpose of doing things 0:22:22.600 --> 0:22:25.960 quickly enough that you can scale up technology, but that 0:22:26.200 --> 0:22:30.840 you can also enable and implement technologies that are already 0:22:31.040 --> 0:22:35.120 fully scaled and commercial and can bring an enormous impact 0:22:35.280 --> 0:22:37.920 in a relatively short amount of time. 0:22:38.800 --> 0:22:42.960 Okay, So Topsail winds either way, whether it's blue or green, 0:22:43.000 --> 0:22:44.440 or low carbon or renewable. 0:22:44.520 --> 0:22:45.480 What a happy company? 0:22:46.400 --> 0:22:48.360 No, I always say, I don't know if it's by 0:22:48.400 --> 0:22:51.480