- “Green hydrogen is critical to the decarbonization of California’s economy and achieving carbon neutrality.”
California Governor Gavin Newsom proposes to add an additional $6.1 billion ($3.5 billion General Fund, $1.5 billion Proposition 98, $676 million Greenhouse Gas Reduction Fund, and $383 million Federal Funds) over the next five years, with a focus on communities most impacted, bringing the total investment to $10 billion over six years to decarbonize the transportation sector.
The Budget makes investments to meet the state’s clean energy goals with $2 billion General Fund over two years to provide incentives for long-duration-storage projects, renewable hydrogen, and industrial decarbonization, including in the food processing sector. The Budget also includes funding for decarbonization and electrification of existing buildings in disadvantaged communities, as well as infrastructure improvements to facilitate the development of offshore wind energy production.
The Budget also includes a new tax credit for those that opt in to develop green energy technologies—totaling $100 million per year for three years. This credit will fund pre-development costs for new technologies such as: electric vehicle manufacturing and infrastructure; geothermal, lithium extraction, and battery manufacturing; long-duration storage; addressing methane emissions; and hydrogen technologies to reduce the use of natural gas. The credit will be awarded by a newly created clean energy board at the Governor’s Office of Business and Economic Development (GO-Biz). So Californians can share more broadly in the gains from these innovations, these credits will be structured so that if the business becomes profitable, a share of profits will be repaid to the state.
The Budget focuses on fostering and deploying technologies to address key energy needs for diverse and reliable sources of electric power, and the decarbonization of buildings, agriculture, and industry by scaling up new technologies designed to drive down consumer costs. Significant investments include:
Green Hydrogen—$100 million General Fund in 2022-23 to advance the use and production of green hydrogen, in which electricity is used to split water into oxygen and hydrogen. Green hydrogen is critical to the decarbonization of California’s economy and achieving carbon neutrality
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