US Regulation Saga: Final Rules on Clean Hydrogen Tax Credit Amidst Transition
Key Ideas
- Final regulations implementing the Section 45V Clean Hydrogen Production Tax Credit have been released after much anticipation and feedback from industry stakeholders.
- The regulations aim to provide flexibility while ensuring integrity in clean hydrogen production, allowing pathways for hydrogen produced using various sources to meet lifecycle emissions standards.
- Key modifications in the Final Rules address concerns regarding indirect emissions, incrementality, deliverability, and temporal matching requirements for the Energy Attribute Certificate framework.
- The Biden Administration's efforts to promote clean hydrogen production through loan guarantees face uncertainty with the upcoming change in administration and Congress, potentially impacting the future of hydrogen incentives.
On January 3, 2025, the US Department of the Treasury and the IRS released the Final Rules for the Section 45V Clean Hydrogen Production Tax Credit. These regulations, stemming from the Inflation Reduction Act of 2022, follow a period of public feedback since the Proposed Rules were published a year earlier. With significant modifications, including changes to the Energy Attribute Certificate framework, the Final Rules aim to balance industry concerns and emission standards. Notable adjustments involve criteria for incrementality, flexibility in uprate rules, and the inclusion of various pathways like nuclear reactors and carbon capture technology to qualify for the tax credit. The regulations also maintain requirements for temporal matching of electricity use for hydrogen production. Despite efforts by the Biden Administration to enhance clean hydrogen production incentives, the future outlook is uncertain with the transition to a new administration and Congress. This uncertainty poses challenges for DOE spending, the Section 45V tax credit, and the broader clean energy landscape.
Topics
Utilities
Biden Administration
Regulations
DOE
Tax Credit
Industry Concerns
Congress
Trump Administration
Clean Energy Standards
Latest News