The inflation Reduction Act just signed into force by US president Joe Biden (pictured) may cause Europe to fail to meet its green targets, says the head of global green energy company Fortescue Future Industries.
Speaking to the Financial Times, Mark Hutchinson, the former head of GE Europe who is now running Fortescue, said that large-scale hydrogen projects on the continent could see the funds used to power them move to the US to take advantage of the tax credits offered under Biden’s new legislation.
According to the White House’s own website, “For the first time ever, the Inflation Reduction Act establishes Make it in America provisions for the use of American-made equipment for clean energy production. The law provides expanded clean energy tax credits for wind, solar, nuclear, clean hydrogen, clean fuels, and carbon capture, including bonus credits for businesses that pay workers a prevailing wage and use registered apprenticeship programmes.”
Further on, the briefing says the Act will look to, “build American clean energy supply chains, by incentivising [sic] domestic production in clean energy technologies like solar, wind, carbon capture, and clean hydrogen”.
It will also target tax incentives towards US-sourced products such as batteries, solar, and offshore wind components, as well as carbon capture systems.
This, says Hutchinson, is likely to draw money away from Europe and into the US. “The US has changed the game,” he told the FT. “They have created an industry out of nowhere.”
Hutchinson went on to say that Brussels needs to batten down the hatches, put its shoulder to the wheel, and come up with a response to the US legislation.
The continent is not entirely bereft of hydrogen projects, however. Earlier this month, the EIB and Hydrogen Europe announced they had an advisory services agreement to look for and examine projects that the bank could provide with financing.
So there’s that…