The U.S. Department of the Treasury and IRS have issued final regulations related to the production tax credit (PTC) for hydrogen under Section 45V of the Internal Revenue Code. This move, enacted by the Inflation Reduction Act, aims to incentivize the production of clean hydrogen in the country. The regulations specify that a PTC is available for each kilogram of clean hydrogen produced during the taxable year for the first 10 years after the hydrogen generation facility is operational. Taxpayers also have the option to claim the investment tax credit (ITC) under Section 48 instead of the Section 45V PTC. The amount of the Section 45V credit per kilogram of hydrogen produced is $3 (adjusted for inflation), multiplied by the applicable rate determined by the lifecycle greenhouse gas emissions rate of the hydrogen. The regulations outline different applicable rates based on the amount of carbon dioxide equivalent (CO2e) emissions per kilogram of hydrogen, ranging from 20 percent to 100 percent of the credit amount. To qualify for the Section 45V credit, the construction of the hydrogen facility must commence before 2033. Failure to meet prevailing wage and apprenticeship requirements will result in a reduction of the credit amount to $0.60 per kilogram. The Holland & Knight Energy Tax Team is currently analyzing the final regulations to provide in-depth analysis and insights to subscribers through their alerts and resources. It is important to note that the information provided in the alert is for general education purposes and should not be used as the sole source of information for legal analysis. The alert emphasizes the need for specific legal advice based on individual factual analysis and highlights the constant changes in laws across jurisdictions.