Final Rules Released for Clean Hydrogen Production Tax Credit Implementation in the United States
Key Ideas
  • The Department of the Treasury and the IRS released Final Rules implementing the Section 45V Clean Hydrogen Production Tax Credit, aiming to promote clean hydrogen production.
  • The Final Rules address industry concerns by providing flexibility while ensuring compliance with IRA's lifecycle emissions standards.
  • Modifications in the Final Rules include changes to the Energy Attribute Certificate framework and eligibility criteria for incrementality, deliverability, and temporal matching.
  • The Final Rules allow pathways for tax credits for hydrogen produced using electricity and certain methane sources, aiming to provide investment certainty in clean hydrogen production.
The Department of the Treasury and the IRS released Final Rules implementing the Section 45V Clean Hydrogen Production Tax Credit in the United States on January 3, 2025. These rules arrived after a significant period of feedback and modifications following the Proposed Rules published in December 2023. The Biden Administration had also announced a substantial loan guarantee for hydrogen fuel production, which might face uncertainties with the change in administration. The Final Rules provide flexibility in compliance with the Energy Attribute Certificate framework to ensure clean hydrogen production meets emissions standards. Key changes include modifications to incrementality requirements, eligibility pathways for electricity sources, and criteria for qualifying reactors and states. Overall, the Final Rules aim to support the growth of clean hydrogen production in the country.
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