WASHINGTON—Big energy producers are sparring over billions of dollars in subsidies from last year’s climate law, a fight that pits the Biden administration’s goals for economic growth against its efforts to reduce greenhouse-gas emissions. The battle is over subsidies to produce clean hydrogen, a potential alternative to oil and natural gas in industries such as steelmaking and trucking where renewable energy and batteries alone aren’t adequate.
The administration is weighing how strictly to define what energy sources can be used to make clean hydrogen and still be eligible for some of the most valuable tax credits in the Inflation Reduction Act. NextEra Energy, Constellation Energy and Plug Power say the subsidies should be widely available—even to companies that generate carbon emissions—to spur the growth of a hydrogen industry seen as crucial to limiting climate change in the long run.
The businesses and industry groups have made the argument in advertisements everywhere from the New York Times and digital media outlet Semafor to the streaming service Hulu. They also have made their case in meetings with Biden administration officials, according to people familiar with the matter.
Labor unions such as the International Brotherhood of Electrical Workers have sided with them. Companies such as Air Products & Chemicals, meanwhile, say the money should go to businesses that use only renewable energy, which could mean slower development and fewer new jobs.
Environmental groups have made the same argument in newspaper ads; the groups also have appealed to administration officials, a person familiar with the meetings said. The spat is the latest example of companies in sectors from electric cars to energy fighting over the
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