The U.S. Treasury Department and IRS have announced the release of final regulations implementing tax credits for the production of clean hydrogen as part of the Inflation Reduction Act of 2022. These regulations aim to provide clarity and flexibility for clean hydrogen investment, incorporating feedback from approximately 30,000 written comments received in response to proposed regulations. The rules cover aspects such as determining greenhouse gas emissions rates, verifying production, and using renewable sources to produce clean hydrogen. The regulations also introduce pathways for producing 'blue' hydrogen from sources like wastewater and coal mine methane. Key features of the final regulations include the retention of 'three pillars' for using Energy Attribute Certificates (EACs) and the inclusion of new criteria for incrementality, especially for electricity generated in states with stringent greenhouse gas emissions caps. Notably, the rules allow nuclear plants at risk of retirement to demonstrate incrementality and consider electricity from generators with carbon capture equipment as incremental if added within a specific window before hydrogen production. Furthermore, the regulations extend the transition period for annual matching of electricity until 2030, enhancing the development of 'book-and-claim' systems for natural gas alternatives. Taxpayers will be able to start using these systems meeting the requirements by 2027. The regulations are set to apply to tax years starting after December 26, 2023, while taxpayers for years after December 31, 2022, and on or before December 26, 2023, can choose to apply the rules provided they do so entirely and consistently. The final regulations represent a significant step towards incentivizing clean hydrogen production and promoting environmental sustainability in the U.S. energy sector.