Welcome back, climate leaders. Epic OneWater Brew made a beer with 100% recycled wastewater sourced from a 40-story luxury apartment building.

In today’s edition:

• 🤔 The green hydrogen debate intensifies with tax credits on the line

• 🔌 New transmission line providing wind power to Southeast US

• 🔋 EV battery range is slowly increasing

Read time: 5 minutes

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BIG STORY

The green hydrogen debate is peaking

Driving the news: The new tax credit for clean hydrogen production, introduced via Biden's Inflation Reduction Act, is prompting an intense debate amongst environmental groups, academics, and energy companies.

What's happening: Hydrogen has huge potential as a carbon-free alternative to fossil fuels in several sectors. But it’s not as straightforward as renewable energy.

• Current hydrogen production methods rely heavily on natural gas.

• The new tax credits aim to promote cleaner, carbon-free methods of hydrogen production, such as electrolysis.

• But companies want a more inclusive incentive, suggesting an annual matching system to buy credits for renewable electricity.

Why it matters: The clean hydrogen industry's trajectory hinges on how the Treasury Department defines clean electricity.

• Utilities could "book" clean energy from green sources and verify it to the Treasury, but this conception is fraught with complications.

• For instance, if unregulated, hydrogen plants could claim energy from outdated or distant sources, potentially increasing real-time energy demand and boosting carbon emissions.

• Supportive tax rules are seen as essential for job preservation, energy security, and achieving decarbonization goals, particularly in difficult-to-abate sectors like steel and chemical production.

What's next: Both sides of the debate are waiting for the Treasury's mid-August guidelines, which could determine the future of the hydrogen industry in the US.

• Some predict a more lenient Treasury stance on the $100B in tax credits.

• The Treasury's rules will have significant effects on international trade too; a weaker set of rules could harm U.S. hydrogen's reputation in global markets.

🌶 Hot take: Hydrogen might not be as climate-friendly as renewable energy, but it’s appealing for two reasons.

• Hydrogen is an endlessly consumable alternative to fossil fuels, so it aligns with the business models of Big Oil. This makes it more likely to be pursued.

• Some use cases, like long-distance trucking, need a viable fuel that does not require stopping every 200 miles to recharge. There’s progress is EV range, but alternative solutions like hydrogen should be explored, too.

HOT TOPICS

1. ☢️ Fusion: Scientists announced a second successful nuclear fusion energy experiment on July 30, 2023. Despite this milestone, much work remains to harness this potentially limitless clean energy for commercial use.

2. 🔌 Grid expansion: The TransWest Express Transmission in Wyoming has begun, aiming to deliver power from wind farms to nearly a million houses in cities like Los Angeles, Las Vegas, and Phoenix. This initiative stems from the Biden administration's 100% clean energy goal for 2035.

3. 🌍 Carbon accounting: Despite concerns over data validity, the carbon accounting sector is booming as companies prepare for future greenhouse gas disclosure requirements. Investment rose to $767mn in 2022, with $333mn invested so far in 2023.

4. 🛠 EV onshoring: Clayco recently began the first phase of a $4 billion EV production site project in North Carolina.

5. 🚗 Range anxiety: Hidden within Tesla, a "Diversion Team" was established to handle and terminate complaints about vehicle range, saving Tesla around $1,000 per settled case.

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CHART OF THE DAY

Improved batteries have allayed EV range anxiety; however, the downside is increased consumption of scarce minerals like lithium, cobalt, and nickel. EV range has risen roughly 10% yearly since 2018, with ranges of many American trucks around 400-450 miles.

ACCLIMATE RECS

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• Why America’s largest tool company couldn’t make a wrench in America

• Little-known but efficient, a different way to heat and cool your house

• The wild west of luxury EVs

• Looking back at the Inflation Reduction Act 

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