US Treasury Provides Flexibility for Green Hydrogen with New Tax Rules
Key Ideas
  • The US Treasury's 45V guidance supports renewable energy-powered electrolytic 'green hydrogen', encouraging clean hydrogen investment and reducing risks in hydrogen development.
  • The final rules emphasize hourly renewable energy matching, incremental energy supply, and regional sourcing to ensure energy usage aligns with emission reduction goals.
  • Exceptions for struggling nuclear plants and states with strong renewable portfolios aim to facilitate green hydrogen production without compromising decarbonization efforts.
  • The extended deadline for hourly matching until 2030 provides more time for renewable energy tracking systems to implement the necessary functionalities for compliance.
The US Treasury has released final guidance under the Inflation Reduction Act's section 45V, offering new tax rules to support renewable energy-powered electrolytic 'green hydrogen'. The rules have been well-received for encouraging clean hydrogen investment and reducing risks in hydrogen development. The guidance reaffirms the importance of hourly renewable energy matching, incremental energy supply, and regional sourcing to ensure that energy usage aligns with emission reduction goals. Exceptions have been made for struggling nuclear plants and states with strong renewable portfolios, allowing them to participate in green hydrogen production without hindering decarbonization efforts. The extended deadline until 2030 for hourly matching provides renewable energy tracking systems more time to implement the necessary functionalities. Overall, the rules aim to facilitate the growth of green hydrogen production in the US market, aligning with international trading standards and promoting clean energy innovation.
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