{"id":25354,"date":"2025-04-16T17:48:10","date_gmt":"2025-04-16T17:48:10","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/25354\/"},"modified":"2025-04-16T17:48:10","modified_gmt":"2025-04-16T17:48:10","slug":"trumps-trade-war-hits-americas-plastic-industrial-complex","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/25354\/","title":{"rendered":"Trump\u2019s Trade War Hits America\u2019s Plastic Industrial Complex"},"content":{"rendered":"

The blue hydrogen produced at Air Products\u2019 Louisiana facility will be eligible for the lucrative 45Q carbon sequestration<\/a> tax credit, which was expanded by the Inflation Reduction Act in 2022 and provides up to $85 per metric ton of carbon that\u2019s permanently locked away. <\/p>\n

The March report from the Institute for Energy Economics and Financial Analysis, however, argues that Air Products makes overly optimistic assumptions about both methane leakage rates and the effectiveness of carbon capture equipment, while underestimating the potency of methane in the short term. The company\u2019s estimates are largely based on a Department of Energy life cycle analysis tool<\/a>, which the report’s authors also believe is flawed. The result, the authors write, is that the Louisiana plant would \u201ccost billions of dollars in subsidies for essentially zero environmental benefit.\u201d<\/p>\n

With lawmakers in Congress considering which IRA tax credits to preserve and which ones to cut to make way for Trump\u2019s spending priorities, now is a critical moment for climate-focused policymakers to have their priorities in order. It\u2019s worth asking which provisions from Biden\u2019s signature climate law are actually delivering a climate bang for their buck. <\/p>\n

Air Products says that its Louisiana facility will sequester 5 million metric tons of CO2 annually over the 12 years that it\u2019s eligible for the tax credit, which equates to $6.3 billion in total tax savings. To state the obvious, that\u2019s a lot of taxpayer money for a project that a leading research group asserts will likely be a net negative for the environment.<\/p>\n

\u201cAs you start expanding the envelope to take into account the full footprint and the full impact of this project and its product, there\u2019s just not much of a benefit there, if any. It may be making things worse.\u201d Anika Juhn, an energy data analyst at IEEFA and one of the report\u2019s authors, told me. These findings are not specific just to Air Products\u2019 upcoming facility \u2014 they\u2019re \u201cbroadly applicable to other blue hydrogen projects,\u201d Juhn said. (My colleague Emily Pontecorvo, for instance, wrote about<\/a> a similar finding regarding methane leakage from the Permian Basin.) At least four of the DOE\u2019s seven hydrogen hubs<\/a> rely on natural gas with carbon capture and storage to some degree. Meanwhile, the Trump administration is looking to cut<\/a> funding for the hubs that primarily produce hydrogen via renewable energy. <\/p>\n

The DOE\u2019s life cycle analysis tool uses an industrial methane leakage rate of 0.9% and a carbon capture rate of 94.5% for the specific method the Air Products facility will use, called autothermal reforming. (Or at least that\u2019s what the IEEFA report said \u2014 I couldn\u2019t find evidence of this carbon capture number in the government\u2019s model itself.)<\/p>\n

When Juhn and her co-author David Schlissel adjusted the analysis of Air Products\u2019 Louisiana project using more typical industrial methane leakage rates of 1% to 4% and carbon capture rates ranging from 60% to 94.5%, they found that only under the most optimistic scenario would the project yield any carbon reductions at all. Even then, avoided emissions would only be about 200,000 metric tons per year of CO2 equivalent, whereas at the high end of the report\u2019s \u201crealistic scenario,\u201d the project could result in an additional 7.5 million metric tons of CO2 equivalent annually.<\/p>\n

\"LifeCourtesy of IEEFA<\/p>\n

To calculate the net life cycle emissions of a hydrogen project, the authors had to take the estimated benefits of hydrogen production into account, a task complicated by the fact that Air Products hasn\u2019t announced any offtakers, making it impossible to know what dirtier (or cleaner) options customers might turn to if they didn\u2019t have access to blue hydrogen. So instead, IEEFA relied on the White House\u2019s general estimate<\/a> that the 3 million metric tons<\/a> of blue and green hydrogen (i.e. hydrogen released from water molecules using carbon-free electricity) produced by the hydrogen hubs would displace 25 million metric tons of CO2. But because the White House didn\u2019t release its formula for determining avoided emissions, take their numbers with a grain of salt.<\/p>\n

All of Air Products\u2019 calculations thus come with the usual caveat, which is that they\u2019re measured against an unknowable counterfactual \u2014 essentially a best guess at what would happen if plans for the Air Products facility went poof. Would the end users opt for hydrogen alternatives or would they rely on a standard natural gas-powered hydrogen facility with no carbon capture? Is it possible that a green hydrogen plant using renewables-powered electrolysis would be built instead?<\/p>\n

All we<\/a>know<\/a> is that a portion of the hydrogen will be turned into ammonia and exported abroad, where Juhn told me it\u2019s likely to be burned as fuel. Another portion will be injected into an existing 700-mile hydrogen pipeline on the Gulf Coast for use by existing customers in industries such as energy, transportation and chemicals. <\/p>\n

While Air Products did not respond to my request for comment on the report, I was able to discuss the results with John Thompson, a director at the climate nonprofit Clean Air Task Force, which advocates for a wide array of climate-focused technologies, including hydrogen with carbon capture and storage. He took issue with the IEEFA study\u2019s methodology, and told me that blue hydrogen projects have the potential to be a big win for the climate, so long as they\u2019re replacing \u201cgray\u201d hydrogen projects \u2014 that is, those powered by natural gas with no carbon capture. <\/p>\n

\u201cWhen you do displace gray hydrogen, you get huge, huge benefits,\u201d Thompson told me. Despite all the unknowns involved, he\u2019s confident the Louisiana project will do just that, primarily due to the existing network of hydrogen pipelines at the site. \u201cThose pipelines are there because they\u2019re serving existing customers \u2014 refineries, ammonia plants, chemical manufacturing,\u201d he said, meaning that \u201cthe likelihood that you\u2019re displacing existing sources is pretty great.\u201d<\/p>\n

Thompson also took issue with the notion that a 95% capture rate is overly optimistic, telling me that there\u2019s no technical barriers to achieving industrial capture rates in the 90s. \u201cThe 95% capture rate that they\u2019re proposing to build towards is what is commercially guaranteed by many vendors,\u201d Thompson said. \u201cIt hasn\u2019t been widely used, not because it\u2019s not commercially available, but because it\u2019s costly, and there hasn\u2019t been much demand for it until we got into climate considerations.\u201d<\/p>\n

To Thompson, the IEEFA report looked more like an \u201cadvocacy piece.\u201d To IEEFA, the Louisiana project still appears to be a government subsidized money-making scheme. Notably, the Air Products facility probably will not qualify for the much debated<\/a> 45V clean hydrogen production tax credit<\/a>, the most generous subsidy of all in the IRA. That credit provides up to $3 per kilogram of clean hydrogen produced \u2014 a whopping $3,000 per metric ton \u2014 for projects with the lowest emissions intensity. It\u2019s also tech-neutral, meaning that so long as blue hydrogen projects have life cycle emissions under 4 kilograms of carbon dioxide equivalent per kilogram of hydrogen produced, they will be eligible for at least a $0.60 credit per kilogram of clean hydrogen. <\/p>\n

Air Products said last May<\/a> that it would not even attempt to claim this credit for the Louisiana facility, even as the company asserts that the complex will produce \u201cnear-zero carbon emissions<\/a>.\u201d A 2023 DOE report<\/a>\u00a0indicated<\/a> few blue hydrogen projects will be eligible, period, given \u201cthe added [natural gas] and electricity needed to run the [carbon capture and storage] facility.\u201d <\/p>\n

So at least by the DOE\u2019s own standards, the hydrogen produced by Air Products will not be \u201cclean.\u201d That\u2019s not a precondition for the carbon sequestration tax credit, though, which doesn\u2019t demand life cycle analysis, just proof that you\u2019re putting a certain amount of CO2 in the ground. Juhn thinks that\u2019s a big mistake. These analyses are \u201cthe only way that you can know whether or not investing in CCS projects makes sense, either in a climate sense or in a financial sense,\u201d she told me. <\/p>\n

But as fossil fuel interests including Occidental<\/a> and ExxonMobil<\/a> have advocated for preserving and even increasing the 45Q tax credit, Juhn doesn\u2019t expect to see any changes to the rule that would mandate more stringent requirements. <\/p>\n

\u201cI do hear the fossil fuel industry saying, Oh, we need blue hydrogen first because we can get things moving. We can get this online and we can start creating this product to stimulate demand,\u201d she told me, citing a common argument that blue hydrogen is a necessary stepping stone to creating a robust, economical green hydrogen economy. \u201cBut the problem is that these facilities, they\u2019re not going to go away when green hydrogen projects come online, and these projects are being built with a 25-, 30-year lifespan.\u201d<\/p>\n

At the very least, what everyone can agree on is the need to address upstream methane leakage. \u201cIt\u2019s not enough to do carbon capture, I can\u2019t emphasize that enough,\u201d Thompson told me, pointing out that methane emissions are \u201cnot a law of thermodynamics\u201d but rather \u201ca variable that we can control if we choose to.\u201d Unfortunately, it looks like the Trump administration won\u2019t be choosing to, as the president recently signed legislation<\/a> scrapping a Biden-era rule that imposed fees on oil and gas producers who emit excess methane. <\/p>\n","protected":false},"excerpt":{"rendered":"The blue hydrogen produced at Air Products\u2019 Louisiana facility will be eligible for the lucrative 45Q carbon sequestration…\n","protected":false},"author":2,"featured_media":25355,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5311],"tags":[1395,15540,7159,15542,5436,15543,2661,15541,479,1219,49,978,659],"class_list":{"0":"post-25354","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-united-states","8":"tag-china","9":"tag-ethane","10":"tag-fossil-fuels","11":"tag-liquified-natural-gas","12":"tag-natural-gas","13":"tag-natural-gas-liquids","14":"tag-oil","15":"tag-propane","16":"tag-tariffs","17":"tag-trade-war","18":"tag-united-states","19":"tag-us","20":"tag-usa"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114348903871875011","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/25354","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=25354"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/25354\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/25355"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=25354"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=25354"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=25354"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}