Pursuing lax rules for accessing hydrogen production tax credits under the IRA might result in more electrolyser sales domestically.

However this would come at a cost of ceding U.S. potential to become the world's green chemical exporting superpower to CN. Thread 1/10

You see, US has loads of land and good renewable resopurces, but China has some of the world's best renewable resources to produce electrolytic hydrogen. 2/10

Map taken from: iea.org/data-and-stati…

So what's stopping CN from taking the crown of renewable molecules exporter?

They haven't managed to produce electrolyser that can follow intermittent energy supply.

Despite strong upcoming demand from EU, CN cannot export as their molecules don't fit EU's renewable definition.

I don't think CN is too phased about exports for the moment. The strategy so far was to create mfg capacity which has translated into a lower capex advantage.

Eventually, however, CN will figure out how to make their electrolysers flexible. 4/10

Cheap electrolyser stacks doesn't mean cheap green hydrogen plants, as pointed out in Ramboll's recent report.

Much of the cost reductions in green hydrogen plants will be driven by upscaled and standardised designs. 5/10

x.com/gnievchenko/st…

But China is pretty much leading in deployment too. So now they have:
- Exceptional RES
- Cheapest stacks
- Biggest plants

To beat CN, you'd need a bigger overall market with similar RES potential. Something like the sum of US and EU markets. 6/10

And that's exactly why regulatory alignment between the two regions through Three Pillars is so important: it creates a harmonised market larger than CN's, on a set of rules where many US and EU companies have an innovative edge. 7/10

So why do some companies, like Cummins or Plug Power continue to lobby for lax rules?

Even among Western manufacturers there are technology leaders and laggards. Those pushing for laxer standards have either cashflow problems, bad tech, likely both. 8/10

reuters.com/business/energ…

Innovative technology providers, leading businesses and EPCs (Ramboll's position on RHS) on the other hand support regulatory alignment through the Three Pillars because they recognise the massive opportunity for the US and the EU to pioneer green chemicals trade. 9/10

The next few weeks will be a defining moment for the US hydrogen sector.

The laggards just want the easiest possible access to subsidies.

But the visionaries and innovators want a harmonised set of rules so they can conquer global markets.

Choose wisely, US Treasury! 10/10