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Hydrogen Growth Demands Permitting Reform

Hydrogen demand is likely to skyrocket in the next few decades—if permitting delays and other setbacks don’t stymie it, according to WSJ Pro (subscription).

What’s going on: “A new report from consulting firm McKinsey forecasts a fivefold rise in hydrogen demand to 600 million metric tons a year by 2050, if climate change is limited to 1.5 degree Celsius. On current trajectories, however, that supply could be between 175 million to 291 million metric tons a year if steps aren’t taken to speed up permitting and lower both equipment and investment costs, the report warned.”

  • The report identified three major challenges to meeting the rising demand: increased costs, a slow permitting process and “lack of access to capital,” which can be attributed largely to higher interest rates.

Incentives abound: Government incentives for hydrogen are on the rise. Up to $300 billion has been made available worldwide for hydrogen-energy projects this year, a sixfold increase from 2021.

  • Last week, the Energy Department announced $7 billion in subsidies to create seven clean-hydrogen “hubs” in the U.S.

More support required: More action from government is still needed—particularly when it comes to allowing hydrogen projects to proceed.

  • “Faster permitting times are needed to bring more hydrogen projects online, as well as the renewable energy to power their electrolyzers, industry experts say. A recent report from the International Energy Agency said current project lead times are too long and can act as a barrier to clean hydrogen uptake.”

What we’re doing: Manufacturers have long been urging policymakers to fix the broken U.S. permitting system.

  • The NAM recently laid out a multistep plan for Congress “to modernize and update our nation’s antiquated permitting system.”
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