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US awards about $335m of investment tax credits for new hydrogen-equipment manufacturing facilities

April 19, 2024

About $335m of investment tax credits have been awarded to eight companies for the construction of new hydrogen-equipment factories in the US, according to the US Department of Energy.

Five of the awards of the Qualifying Advanced Energy Project Credit, also known as 48C, will go towards the construction of new electrolyser manufacturing facilities, with two allocated for fuel-cell production, and another for equipment that converts hydrogen and captured CO2 into e-fuels.

The recipients are as follows (in order of award size):

1) Danish manufacturer Topsoe receives $135.9m that will be used to build a “state-of-the-art” solid-oxide electrolyser factory in Chesterfield, Virginia

2) Canadian fuel-cell maker Ballard Power Systems is to use its $54m award to build a new giga-scale fuel-cell factory in Rockwall, Texas.

“In Phase1, Ballard plans to build and commission this new manufacturing facility with annual production capacity of 8 million MEAs [membrane electrode assemblies], 8 million bipolar plates, 20,000 fuel cell stacks, and up to 20,000 fuel cell engines per year, or the equivalent of 3GW of fuel cells,” the company wrote in its application.

3) Norwegian hydrogen pure-play Nel has been awarded almost $41m that will go towards a proposed 4GW electrolyser factory in Plymouth Township, a suburb of Detroit, Michigan. This funding was actually announced by Nel earlier this month.

4) Belgian manufacturer John Cockerill will put its $34.15m award towards a new electrolyser gigafactory in Baytown, Texas, producing 200 of its 5MW pressurised-alkaline machines annually.

5) US start-up Twelve Benefit Corporation will use its $28.5m of funding to help build a factory in Alameda, California, producing what it calls “CO2 electrolysers” that combine clean hydrogen and captured carbon dioxide to produce e-fuels such as synthetic aviation fuel.

6) US manufacturer Nuvera Fuel Cells will spend its $14.1m award on expanding and re-equipping its fuel-cell factory in Billerica, Massachusetts, “to meet anticipated demand for both current and next-generation fuel-cell engines, with the latter expected to predominate after commercial launch in 2024”, it said.

7) US start-up Electric Hydrogen — which counts Microsoft billionaire Bill Gates among its key investors and supporters — will receive $18.35m that will go towards its planned 1.2GW factory in Devens, Massachusetts, which will produce massive 100MW electrolyser stacks.

8) US manufacturer Cummins will channel its $10.6m of tax credits into large-scale PEM electrolyser production facilities at its existing plant in Fridley, Minnesota, which the company plans to expand from 500MW of annual capacity to 1GW.

The Department of Energy also released the details of 48C tax credit recipients in other industries, such as grid, battery and electric-vehicle components and other clean-energy materials and equipment — a total of $1.93bn across 35 projects in 20 US states.

The Qualifying Advanced Energy Project Credit (48C) programme was established by the American Recovery and Reinvestment Act of 2009 and expanded with a $10bn investment under the 2022 Inflation Reduction Act of 2022.

It provides an investment tax credit of up to 30% of qualified investments for certified projects that meet prevailing wage and apprenticeship requirements, according to the Department of Energy.

By Leigh Collins