After the Biden-Harris administration outlined strict eco-friendly eligibility rules for its lucrative $100 billion hydrogen production tax credit late last year, it immediately touted a passionate endorsement from the Pennsylvania-based energy corporation Air Products.
"[These rules] will be essential to delivering real emissions reductions, creating the stimulus for broader investments across the hydrogen value chain, and cementing the U.S.’s global climate leadership," Air Products president and CEO Seifi Ghasemi said in a Dec. 22 statement. The administration blasted out Ghasemi's praise—an anomaly in the hydrogen industry, which largely opposed the proposed rules—in a Treasury Department press release, which also highlighted a letter Air Products sent days earlier that called for stringent "climate-aligned" rules governing which projects can receive the tax credit.
But the company's main green hydrogen investment is an $8.5 billion under-construction facility located not in the United States, but in Saudi Arabia, according to a Washington Free Beacon review of financial filings. The company is developing the project as a joint venture with two Saudi government-tied companies but remains its primary beneficiary, according to SEC filings.
Last year, Ghasemi said he hoped the majority of the hydrogen produced at the Saudi-based "mega project" would be exported to Europe and California. His company went on to announce that it was indefinitely pausing its largest investment in North America, a green hydrogen project being developed in Texas. That decision leaves Air Products with only one project that could be eligible for the hydrogen production tax credit: a tiny 10 metric ton-per-day facility in Arizona set to come online this year.
Air Products's substantial investment in green hydrogen production overseas—and lack of active investment in domestic production—raises questions about its enthusiasm for strict eligibility requirements governing the tax credit, which was established under the Inflation Reduction Act, the Biden-Harris administration's flagship climate bill. Industry groups say the proposed requirements could kneecap domestic production, thus protecting Air Products's imports from Saudi Arabia against U.S. competition.
Pyle added that Air Products's actions suggest the company is more interested in "leveraging the political process to fleece the taxpayers and box out its competitors at the same time" than protecting the environment, as it has claimed.
The company's involvement in the issue also spotlights Ghasemi's sizable political contributions and his company's lobbying activity. On June 25, Ghasemi wrote a $350,000 check to the Biden Victory Fund, which has since morphed into the Harris Victory Fund—by far his largest-ever political donation, according to financial disclosures. That same day, he sent the fund another $41,300 and wired the max contribution of $6,600 to President Joe Biden's presidential campaign.
Earlier this month, meanwhile, Ghasemi's wife Ellen donated $30,000 to the Harris Victory Fund and $20,000 to the Democratic National Committee. She wired another $40,000 to the then-Biden Victory Fund in April.
"There is nothing new here," Tom Pyle, the president of the Institute for Energy Research, told the Free Beacon. "Air Products lobbied for a specific policy outcome, namely a more restrictive framework for the tax credit, and the administration was more than happy to reward them for their longstanding political support."
"Of course the policy will likely stymie efforts to develop the product domestically, but apparently that is a secondary consideration for the Biden-Harris administration," he said. "After all, there is an election on the horizon."
Air Products ramped up its federal lobbying activity after Congress passed the Inflation Reduction Act, shelling out more than $4.6 million since 2022 on lobbying, compared to the $590,000 it spent during the prior three years combined, according to lobbying disclosures.
The disclosures almost exclusively list the hydrogen production tax credits and Inflation Reduction Act as the focuses of the company's lobbying activity. They further note that Air Products conducted its lobbying at the White House, the Treasury Department, and Congress.
The contributions and lobbying expenditures suggest Ghasemi and Air Products have a lot to gain and a lot to lose from both this week's presidential election and the federal government's upcoming actions on hydrogen tax incentives. While the Biden-Harris administration has evidently taken Air Products's side on these issues, Republican presidential nominee Donald Trump has vowed to gut the Inflation Reduction Act's many green energy provisions.
"Consistent with public statements, we will not make a final investment decision on the Texas project until the [Inflation Reduction Act] regulation is released," Air Products told the Free Beacon. "Importantly, the Texas project as currently designed meets the highest standards of green hydrogen production."
"Air Products’ position remains to support the strictest standard for green hydrogen to ensure there are real and verifiable emissions reductions and to promote global trade," the statement continued. The company added that it has yet to formally announce a deal to send hydrogen produced in Saudi Arabia to California.
Hydrogen power production has received increased attention because of its potential to reduce carbon emissions in the manufacturing and trucking sectors. But in its December proposal, the Treasury Department ultimately sided with environmentalists and restricted hydrogen facilities from using fossil fuels—even in the near term—to power the process of extracting hydrogen, something industry groups representing hydrogen developers have argued isn't feasible.
The comment period for the Treasury Department's proposal ended in March, meaning the agency may finalize the rules in the coming months. The agency did not respond to a request for comment.