Linde not affected by latest U.S. green subsidies package updates - CEO (updated)

OCI

06/02/2024 17:18

(Rewrites with new details)
       Feb 6 (Reuters) - Linde  LIN.O  Chief Executive Sanjiv
Lamba on Tuesday said recent updates to U.S. Inflation Reduction
Act (IRA) subsidies for clean energy projects will not affect
the company's current projects in the United States. 
    "Recently, there have been some updates and indeed some
confusion regarding the IRA regulations," Lamba said during a
post-earnings call. 
    U.S. President Joe Biden signed the landmark $430-billion
IRA into law in 2022. It provides wide-ranging subsidies to help
the green energy transition and seeks to reduce both inflation
and the U.S. budget deficit. 
    In late December, the U.S. Treasury issued guidance on
claiming the 45V tax credit, which forms part of the bill. That
credit is intended mostly for low-carbon dioxide (CO2) green
hydrogen production, currently only a marginal part of Linde's
output.
    "We expect future U.S. on-site clean hydrogen projects to
primarily leverage 45Q credits since we have not yet identified
any large on-site green hydrogen projects that meet our
investment criteria," Linde's CEO added.
    The 45Q credit is another form of tax relief, also part of
the IRA, but intended for CO2 capture, including during the
production of so-called blue hydrogen, in which Linde is
involved. 
    Blue hydrogen, which currently accounts for less than 10% of
Linde's sales, is extracted from natural gas using steam-methane
reforming, which captures CO2 emissions, which are then
transferred to underground or subsea storage.
    Green hydrogen is made via electrolysis out of water using
renewable wind and solar energy, but is more expensive to
produce than blue hydrogen. 
    Linde will invest $1.8 billion in a blue hydrogen plant in
Texas that will supply fertilizer producer OCI's  OCI.AS 
ammonia plant and is relying on the IRA tax relief to lower the
costs for the project.
    
  

 (Reporting by Andrey Sychev, editing by Kirsti Knolle and
Sharon Singleton)
 ((andrey.sychev@thomsonreuters.com;))