US EPA expected to drop hydrogen from power plant rule, sources say

By Valerie Volcovici

WASHINGTON (Reuters) - The Biden administration is expected to drop green hydrogen from its landmark plan to slash greenhouse gas emissions from the power sector, to reduce the risk of lawsuits if the nascent technology doesn’t reach commercial scale, according to three sources familiar with the matter.

The move reflects skepticism within the U.S. government that the technology – in which hydrogen fuel is extracted from water using zero-emissions energy sources like wind and solar - will develop quickly enough to become a significant tool to decarbonize the electricity industry.

The Environmental Protection Agency (EPA) will unveil its final rule as soon as Thursday, the sources said, marking a huge milestone in President Joe Biden’s strategy to fight climate change.

The EPA did not respond to a request for comment.

E&E News was first to report that the EPA was considering the change.

The EPA’s initial power plant proposal had set standards that would push fossil fuel power plant operators to either also use super-low-emissions hydrogen to fuel their plants, or install carbon capture and sequestration (CCS) technology to siphon the CO2 from a plant’s smokestack.

Dropping the use of hydrogen could strengthen the rule legally, the sources said. Opponents of the plan had warned that the technology may not be commercially viable when rules kick in in 2030 for gas plants and 2032 for coal plants.

The power plant rule is among a raft of regulations the administration is seeking to finalize in the coming weeks to safeguard them from potential reversal under the Congressional Review Act should former President Donald Trump win the November election.

The CRA allows a newly elected Congress to review and repeal laws that were recently created.

The EPA last month narrowed the scope of the power plant regulation by removing existing gas plants from the standards, after pushback from utilities that called the initial proposal unworkable.

(Reporting by Valerie Volcovici; Editing by Michael Erman)