Legislation Risks Biden’s Multi-billion Dollar Investment In California’s Hydrogen Future To Fight Climate Change

California’s Hydrogen Legislation: A Potential Roadblock to Clean Energy Development?

Legislation being debated in the California Assembly this week could jeopardize the Biden Administration’s recently-announced $1.2 billion award to California to accelerate the development and deployment of clean renewable hydrogen and upwards of $11 billion in private investment in hydrogen, according to a coalition of labor, business, and clean energy groups that announced their opposition to the bill today.

Assembly Bill 1550, authored by Assembly member Steve Bennett (D-Ventura), would mandate the costly and burdensome “3 Pillars” principles on hydrogen production in California. 

However, opponents say these rigid requirements will likely result in the chilling of the development of renewable and clean hydrogen that is critical to cutting pollution and expanding the clean energy in California. Programs like the state’s Renewable Portfolio Standard and cap and trade program already provide the desired environmental protections making AB 1550 unnecessary and fatal to the development and deployment of clean and renewable hydrogen. They also noted it would risk California’s status as one of seven regional “hydrogen hubs” in the U.S. named by the U.S. Department of Energy.

“This proposed legislation puts 220,000 new hydrogen-related jobs at risk and adds new regulatory hurdles for hydrogen – a step backwards in developing this clean energy source rapidly so California can meet its climate goals,” says Jennifer Barrera, CalChamber CEO/President.

“Assembly Bill 1550 does not allow California to embrace the full potential of hydrogen technologies and their many benefits,” wrote Chris Hannan, president of the California State Building Trades and Construction Council, in a letter to legislators.

“AB 1550 raises concerns about the potential impact on over $11 billion in private investment and hundreds of thousands of jobs,” says Lance Hastings, President and CEO of the California Manufacturers and Technology Association (CMTA). “This poses challenges to the ongoing efforts of both federal and state governments to boost our clean energy economy.”

The California Hydrogen Coalition, California Chamber of Commerce, the California Manufacturers and Technology Association, California State Council of Laborers, the California-Nevada Conference of Operating Engineers, and the BioEnergy Council of California were among the more than 25 organizations and businesses announcing their opposition to AB 1550 in a letter to legislators.

The groups said the bill would restrict hydrogen production to the intermittent patterns of wind and solar and interconnection and transmission infrastructure delays currently faced by all development projects in the state. It also would hold hydrogen to a different and costly standard from other renewable sources in the state’s Renewable Portfolio Standard, requiring compliance verification 8,736 times per year versus a once per year requirement for other renewable and clean power sources.

In addition, it provides a “blank check” to the Air Resources Board, Public Utilities Commission, and California Energy Commission to set interim renewable hydrogen targets, directly contradicting the assertion that these strict requirements are intended for 2045.

The funds for hydrogen awarded to the state that would be at risk with the bill’s passage would resulting in cutting up to two million metric tons of carbon emissions every year – equivalent to the pollution of 445,000 gasoline-powered cars annually; create an estimated 220,000 new jobs, including 130,000 in construction and 90,000 permanent jobs; result in an estimated $2.95 billion per year in economic value from better health and health cost savings; and send 40 percent of the benefits from projects to disadvantaged communities.

The bill is expected to be taken up by the Assembly as early as Monday.