H2Tech (H2T) sat down with Cody Bateman (CB), Founder and CEO of GenH₂, regarding the Inflation Reduction Act of 2022 and its effects on the H₂ economy.

H2T: What are your thoughts regarding the Inflation Reduction Act?

CB: While I do understand there is controversy associated with certain aspects of the bill, we are very excited that some key energy related topics are specifically addressed. Unfortunately, most individuals in the U.S. do not understand that investments must be made today to secure our energy future. We are already falling behind other parts of the world, and this package will help us start the process of catching up. We do, however, want to point out that there are two critical pieces missing from the Act that are essential to reach a long-term successful H₂ economy:1. A mandated trickledown requirement in the bill so the funds will reach smaller pure-play H₂companies; and 2. Incentives for the larger companies to grow the H₂ economy and achieve long-term success.

Now that the bill has passed, I anticipate there will only be a small trickle-down effect, which means the key will be how companies can work together, understand the funds that have been allocated and explain the short-term and long-term value to the public. I believe that to get to market as soon as possible, a portion of funds must go to pure-play companies who are doing advanced research and commercialization. That is ultimately how you create an optimal solution.

At the end of the day, this package needs to be seen and accepted as a long-term investment to lay the foundation and create an energy economy. We need to better tell that story as an industry, including the question: How will this bill ultimately affect everything–the planet, our children and the economy?

H2T: What funds specifically are you concerned will not reach smaller pure-play companies?

CB: The wording associated with the act when it comes to the environment was written so vaguely, and the associated funds are so large, that I expect only the largest companies (those with lobbyists and/or boots on the ground) will be able to apply for the available grants and rebates successfully. These larger firms may utilize the funds to work with smaller companies, but unfortunately, I expect that most will be used to fund efforts and investments that have already been made. 

The most effective technologies to address the concerns identified in this bill are primarily possessed by small start-ups–including pure-plays like GenH2–and not huge conglomerates. The larger firms have already started to acquire some of this revolutionary technology but do not seem incentivized to move it to commercialization. I anticipate that most of the technology funded by these efforts will go to firms that have decades-old technology, which will satisfy the terms of the agreements but unfortunately will not further the cause of more efficient solutions, which in my view, are required for future success.

H2T: What other incentives do you believe would encourage larger companies to grow the H₂ economy?

CB: I suggest that provisions requiring small- and medium-sized businesses (SMBs) with gross annual sales below $100 MM and fewer than 500 employees, receive more than 50% of these funds. If this were done, we would see true competition, and new projects could then be awarded based on the merit of the technology and not on financials, access to lobbyists and proactive marketing. Additionally, the incentives should require a set percentage for SMBs and research by SMBs to provide newer alternatives. These adjustments would increase innovation in the industry and drive forward progress at a more rapid rate.