Exxon Mobil Corp. is lobbying the Biden administration to allow hydrogen made from natural gas to qualify for some of the most lucrative subsidies available in the President Joe Biden’s signature climate law, pushing for billions of dollars in tax credits intended to help phase out fossil fuels.
The company is targeting “key decision makers” in Washington including Democratic lawmakers, US Treasury Department officials and think tanks, according to an internal memo seen by Bloomberg. Exxon is stepping up efforts to ensure that what it dubs as low-carbon natural gas is “properly recognized“ by the Biden administration, the memo said.
If Exxon’s efforts are successful, it will likely open the door for fossil-fuel companies to win billions of dollars in subsidies and become dominant players in hydrogen, which some analysts say is crucial for decarbonizing heavy industries, trucking and other sectors. That worries environmentalists who are skeptical hydrogen from natural gas can ever be emission-free and say promoting it will ultimately spur more fossil-fuel production, undermining the tax credit’s original goals.
“Their view is the model would say that hydrogen we can produce has lower carbon emissions and therefore would qualify for a higher tax incentive,” Furman said. The vast majority of hydrogen produced today is derived from natural gas. It’s done using a process called steam-methane reforming, which releases carbon dioxide into the atmosphere. So even if the hydrogen itself burns cleanly, the process of making it worsens emissions that cause global warming. Hydrogen produced from natural gas is known as “blue hydrogen.”
Too much focus, Exxon said in its memo, has been on hydrogen that’s made by using electricity to split water into hydrogen and oxygen.
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