The Green Hydrogen Economy is coming to California! 2023 is set to be a banner year for green hydrogen project development in California thanks to growing government commitment (see a brief timeline of key investments in 2022 below) and increasing demand.
That is why we are publishing Sheppard Mullin’s Green Hydrogen Readiness Assessment. This complimentary report evaluates the preparedness of California’s statutes, regulations and regulatory bodies for the green hydrogen economy. Those developing and investing in green hydrogen infrastructure should prepare now to navigate the complex state and local laws applicable to the industry.
2022 Green Hydrogen Milestones
- December 15, 2022:
- CPUC approved SoCalGas Co.’s memorandum account application for the Phase 1 feasibility study of Angeles Link, which, if completed, will be the largest green hydrogen pipeline in the US.
- CPUC ordered utilities Pacific Gas and Electric Company, SoCalGas, Southwest Gas Corporation, and San Diego Gas and Electric to develop pilot projects to evaluate standards for the injection of green hydrogen into California’s pipeline system.
- California approved its roadmap to achieve complete carbon neutrality by 2045, a commitment that will lean heavily on green hydrogen and other renewable energy technologies.
- September 27, 2022: California signed AB-157 into law, Section 4 of which authorizes the Governor’s Office of Business and Economic Development to submit an application to receive grants from the regional green hydrogen hub program established by the US Department of Energy pursuant to Section 16161a of Title 42 of the United States Code.
- September 16, 2022: California signed SB-1075 into law, requiring various state agencies to analyze green hydrogen’s potential to further decarbonization and reduce greenhouse gas emissions and provide policy recommendations to fast-track the industry’s growth.
- August 16, 2022: The Inflation Reduction Act (IRA) set aside $9.5 billion in production tax credits (PTC’s) for green hydrogen development, granting $3/kg of green hydrogen produced, bridging the current disparity in cost between green and grey hydrogen.
- May 18, 2022: The California Governor’s Office of Business and Economic Development announced the state’s intention to develop a renewable hydrogen hub using funds from the federal Infrastructure Investment and Jobs act.
- May 17, 2022: The Los Angeles City Council approved a motion requiring the Port of Los Angeles, Los Angeles Department of Water and Power, and other agencies to submit a proposal to the US Department of Energy to receive federal funds to become a regional green hydrogen hub with the goal of decarbonizing the Port of Los Angeles.
Please reach out with any questions and stay tuned for more green hydrogen industry updates in the year ahead.
*Abigail Sharkey is a summer associate in the firm's Del Mar office.