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Democratic lawmakers seek incentives for hydrogen production

January 26, 2022 GMT
New Mexico legislators including Democratic state Rep. Patricial Lundstrom of Gallup, foreground, proposed a $1 billion increase in general fund spending for the coming fiscal year, at a news conference in Santa Fe, N.M., on Thursday, Jan. 6, 2022. The proposed 14% boost is aimed at shoring up access to health care, improving public education and providing new investments in child welfare and public safety. A separate proposal from Gov. Michelle Lujan Grisham shares many spending priorities. (AP Photo/Morgan Lee)
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New Mexico legislators including Democratic state Rep. Patricial Lundstrom of Gallup, foreground, proposed a $1 billion increase in general fund spending for the coming fiscal year, at a news conference in Santa Fe, N.M., on Thursday, Jan. 6, 2022. The proposed 14% boost is aimed at shoring up access to health care, improving public education and providing new investments in child welfare and public safety. A separate proposal from Gov. Michelle Lujan Grisham shares many spending priorities. (AP Photo/Morgan Lee)
1 of 3
New Mexico legislators including Democratic state Rep. Patricial Lundstrom of Gallup, foreground, proposed a $1 billion increase in general fund spending for the coming fiscal year, at a news conference in Santa Fe, N.M., on Thursday, Jan. 6, 2022. The proposed 14% boost is aimed at shoring up access to health care, improving public education and providing new investments in child welfare and public safety. A separate proposal from Gov. Michelle Lujan Grisham shares many spending priorities. (AP Photo/Morgan Lee)

SANTA FE, N.M. (AP) — New Mexico legislators are proposing an array of financial incentives aimed at fostering hydrogen fuel production and distribution in New Mexico, in a bill published Tuesday.

Incentives in the lengthy proposal include tax credits and deductions for private enterprises and loans underwritten by local taxpayers.

Environmentalists are wary of the impacts of hydrogen production that uses natural gas as an energy source and feedstock, arguing that it can prolong dependence on fossil fuels and relies on relatively unproven technologies to capture and dispose of carbon pollution.

Gov. Michelle Lujan Grisham is backing the initiative and says that hydrogen producers who use cleaner methods can qualify for larger tax incentives under the proposed legislation.

At the same time, the U.S. government is devoting $8 billion to hydrogen projects under an infrastructure bill signed by President Joe Biden in November 2021, with an eye toward developing cleaner sources of fuel for industrial sectors and the deployment of fuel-cell vehicles in heavy, long-haul trucking.

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The incentives in New Mexico are proposed by legislators including Democratic Reps. Patricia Lundstrom of Gallup, Javier Martínez of Albuquerque and Nathan Small of Las Cruces.

“This bill ensures the growing hydrogen economy aligns with New Mexico’s ambitious climate goals while creating clean energy jobs for New Mexicans,” the governor’s office said in an email.

In providing financial incentives to “clean” hydrogen facilities, the bill sets limits and guidelines for climate warming byproducts from hydrogen production.

New Mexico’s regular annual legislative session ends on Feb. 17.