US Leadership in Clean Energy Incentives Brings New Investments and Jobs

In April, we announced our plans to build a new state-of-the-art facility in Chesterfield, Virginia, to manufacture advanced, energy-efficient Solid Oxide Electrolyzer Cells (SOEC) - a key component in the world’s most efficient technology for producing clean hydrogen and derivatives like eAmmonia and eMethanol. Topsoe’s SOEC technology is a modular design that leverages high-temperature electrolysis — a tested and proven process that enables industrial-scale production of green hydrogen using renewable electricity. The hydrogen produced can be turned into liquid fuelsand can help decarbonize energy-intensive sectors like heavy-industry and long-distance transportation.

This factory, if it reaches final investment decision, would represent Topsoe’s largest investment in the United States and is an example of how global companies are increasingly expanding their clean energy investments and activities in the U.S. following the enactment of the 2022 Inflation Reduction Act (IRA).

The IRA offers incentives for expanding our SOEC manufacturing in the U.S. Topsoe won a tax credit allocation of nearly $136 million under Section 48C made available by the IRA. These tax credits are important drivers to help lower the cost of advanced energy technologies and to help create clean economy jobs in communities like Chesterfield.

The future network of U.S. hydrogen hubs supported by the Bipartisan Infrastructure Law paired with the IRA incentives are accelerating investments in the energy sector, which will bring more manufacturing jobs to the U.S. and grow the clean energy economy.

The new facility, aided by the 48C tax credit, will help drive down the cost of clean hydrogen with increased efficiency compared to other electrolyzer technologies. These technologies are key for decarbonizing energy-intensive industries, such as steel, mining, and long-distance transportation that account for roughly 30% of global greenhouse gas emissions[1] and for which direct electrification is not a viable solution.

With a planned capacity of more than 1 GW, the factory's output of electrolyzer stacks will enable an annual greenhouse gas emission avoidance of up to 2 million tonnes CO2e, which is equivalent to the amount of carbon sequestered by over 33 million tree seedlings grown for 10 years.[2]

Topsoe’s more than $400 million planned investment will also bring real economic benefits. The factory would create at least 150 direct jobs in Virginia and more than 1,000 indirect jobs through the value chain, along with many millions of dollars of residual local, state and wider economic benefits. That’s why it has received bipartisan support from key Virginia leaders including: Virginia Governor Glenn Youngkin, Senators Tim Kaine and Mark Warner and Congresswoman Jennifer McClellan.

Growing the U.S. clean energy economy will take an all-of-the-above approach, requiring collaboration between industry and government at all levels.

That includes the energy-intensive industries who could most benefit from the clean hydrogen produced by our SOECs and are often referred to as “hard-to-abate.” But hard does not mean impossible. It’s a matter of investing in the right energy transition technologies to implement at scale and drive down costs.

The IRA and other U.S. policies have been critical catalysts to do exactly that and help us bridge the decarbonization divide within some of the most challenging economic sectors. With the market certainty supported by these policies, Topsoe will continue driving decarbonization solutions in key industries that can also grow the economy.

[1] US Environmental Protection Agency

[2] https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator#results