The Andrew Forrest-chaired iron ore major has ambitious plans to become a force in renewable energy. But proposed US rules would stifle growth, it warns.
Already a subscriber?Fortescue says the proposed design of the Biden administration’s green incentives scheme could triple the cost of low-carbon hydrogen projects and stifle growth in the sector, warning that developers will reduce the size of their plans in response.
. Fortescue was hoping to use tax credits delivered as part of Joe Biden’s $US369 billion Inflation Reduction Act, which is expected would almost halve the cost of some hydrogen projects in the United States.which provide the detail on eligibility for the tax credits. Fortescue’s biggest problem is the requirement that companies must match each hour of production to an hour of renewable power generation and consumption to be eligible.
Andy Vesey, Fortescue’s North American chief, last week said the “hourly matching” rule would force a hydrogen developer to sign up for seven times more renewable power than they could consume at any one time. The “additionality” clause is designed to ensure the green hydrogen industry stokes investment in new renewables projects and is also a blow for an early-stageFortescue has warned the government that wait times for new clean power projects of up to five years and challenges with building transmission lines means the “additionality” clause will slow development of the hydrogen industry.
reported in January. That project, known as H2OK, is in Oklahoma and proposes to use electricity from the state’s power grid.
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