US Treasury Releases Final Regulations on Clean Hydrogen Production Tax Credit
Key Ideas
- The US Treasury and IRS finalized regulations for the clean hydrogen production tax credit under section 45V, a key part of the Biden Administration's clean energy push.
- Changes in the final regulations include exceptions for nuclear facilities at risk of shutdown, adjustments to the temporal matching deadline, and flexibility in geographic matching.
- The regulations allow hydrogen producers to rely on the GREET model for 10 years, providing clarity on emission calculations and encouraging the use of renewable power sources.
- The goal of the regulations is to incentivize the production of clean hydrogen by rewarding processes with lower greenhouse gas emissions, thereby supporting the growth of the clean hydrogen industry.
On January 3, 2025, the US Internal Revenue Service (IRS) and the Department of the Treasury released final regulations regarding the clean hydrogen production tax credit under section 45V of the Internal Revenue Code. This credit, a key component of the Biden Administration's clean energy initiative, aims to incentivize the production of clean hydrogen. The regulations, published in the Federal Register on January 10, 2025, include provisions such as the 'three pillars' of clean power, additionality/incrementality requirements, temporal and geographic matching, and hourly accounting for emissions.
The Department of Energy (DOE) also released a White Paper supporting Treasury's analysis and introduced a new version of its model, 45VH2-GREET, for assessing greenhouse gas emissions related to hydrogen production. The regulations aim to determine GHG emissions using the GREET model, with an emphasis on reducing carbon intensity in hydrogen production processes.
Changes in the final regulations provide exceptions for nuclear facilities at risk of shutdown and adjust deadlines for matching renewable power with hydrogen production. The regulations also offer flexibility in geographic matching and allow hourly emission calculations to ensure compliance with GHG limits. Importantly, the final regulations support the use of renewable sources for hydrogen production, promoting cleaner processes with lower emissions.
Overall, the sentiment towards hydrogen in this article is positive, as the regulations aim to support the growth of the clean hydrogen industry by providing clarity, flexibility, and incentives for reducing greenhouse gas emissions. The focus is on encouraging the use of renewable power sources and ensuring a more sustainable approach to hydrogen production.
Topics
Production
Clean Energy
Biden Administration
Renewable Power
Regulations
Greenhouse Gas Emissions
Department Of Energy
Tax Credit
IRS
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