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Linde CEO Sanjiv Lamba on Feb. 6 said recent updates to U.S. Inflation Reduction Act (IRA) subsidies for clean energy projects will not affect the company's current projects in the United States.
"Recently, there have been some updates and indeed some confusion regarding the IRA regulations," Lamba said during a post-earnings call.
U.S. President Joe Biden signed the landmark $430-billion IRA into law in 2022. It provides wide-ranging subsidies to help the green energy transition and seeks to reduce both inflation and the U.S. budget deficit.
In late December, the U.S. Treasury issued guidance on claiming the 45V tax credit, which forms part of the bill. That credit is intended mostly for low-carbon dioxide (CO2) green hydrogen production, currently only a marginal part of Linde's output.
"We expect future U.S. on-site clean hydrogen projects to primarily leverage 45Q credits since we have not yet identified any large on-site green hydrogen projects that meet our investment criteria," Linde's CEO added.
The 45Q credit is another form of tax relief, also part of the IRA, but intended for CO2 capture, including during the production of so-called blue hydrogen, in which Linde is involved.
Blue hydrogen, which currently accounts for less than 10% of Linde's sales, is extracted from natural gas using steam-methane reforming, which captures CO2 emissions, which are then transferred to underground or subsea storage.
Green hydrogen is made via electrolysis out of water using renewable wind and solar energy, but is more expensive to produce than blue hydrogen.
Linde will invest $1.8 billion in a blue hydrogen plant in Texas that will supply fertilizer producer OCI's ammonia plant and is relying on the IRA tax relief to lower the costs for the project.
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