Kareem Afzal, CEO of PDC Machines, shares his thought on the U.S. Inflation Reduction Act of 2022 and its effects on the H₂ economy.

In mid-August, the Biden administration signed the Inflation Reduction Act (IRA) of 2022 into law, promising a suite of climate protections and investments in clean energy. Among these promises is a commitment to H₂ energy and fuel cell electric vehicles, creating high-quality jobs and accelerating the decarbonization of the U.S. economy from industry to mobility.

The IRA is a watershed piece of legislation. This bill addresses two points of anxiety for Americans at once: the creation of high-quality jobs and the role of climate change in their daily lives. We can supercharge economic growth with jobs in the H₂ sector while decarbonizing the U.S. economy, which the International Panel on Climate Change reports needs to be at net-zero by 2050 to avoid the worst scenario.

H₂ is one of the fastest growing technological sectors in green energy, and with this bill is poised to take off in size and viability. The IRA introduces a 10-yr tax credit for clean H₂ and H₂ energy storage, revises the clean vehicle credit to include H₂ fuel-cell vehicles, and expands the clean energy station tax credit, among other investments in clean energy. This provides a strong impetus for companies to invest in green H₂.

Even though there are concessions for oil and gas, the great majority of this bill is exactly in line with where H₂ wants to go, and where the U.S. economy needs to go. Advocates call this the single biggest piece of climate change legislation passed in the U.S., and it is, with $300 B invested in renewable energy products, technologies and energy efficiency.

Even outside of H₂, the IRA delivers the climate goods, with the potential to increase U.S. solar energy and wind energy output tenfold. This type of investment incentivizes the creation of clean energy jobs, which is a crucial part of the bill that cannot be overemphasized. Clean energy jobs pay well, help decarbonize the economy, and invest in American infrastructure as dirty energy jobs continue to vanish. It is often a lazy point against climate legislation that the energy transition will cost money, but Deloitte reports that climate change itself would cost the U.S. federal government $14.5 T over the next 50 yr if left unmitigated.

This brings us to the single most important issue in climate change—the compounding and cascading effects of climate change. If left unaddressed, ecological shocks will precipitate continued and worsening economic shocks as natural catastrophes worsen and destroy infrastructure, job shocks as populations are displaced and lose their homes, immigration and supply chain shocks as people are forced to relocate, and so on. We cannot isolate the ecological sector from the economic sector, we cannot isolate human thriving from economic externalities. These are all intrinsically linked, and this piece of legislation, which advocates rightly identify as an enormous step forward for climate legislation, is an excellent and long overdue salvo in the fight against climate change.