US Treasury Eases Rules for Hydrogen Producers in Inflation Reduction Act Amendment
Key Ideas
  • The US Treasury has relaxed regulations for clean hydrogen producers, extending the deadline for hourly matching of renewable electricity with hydrogen production to 2030.
  • Producers now have the option to use existing nuclear reactors as electricity sources, and fossil fuel generators equipped with CCS may also be eligible.
  • The revisions, influenced by public feedback, aim to drive significant deployment of clean hydrogen, create jobs, and position the US as a global leader in green hydrogen.
  • Despite uncertainties about the future of hydrogen incentives under the upcoming Trump administration, legal battles may arise if attempts are made to significantly alter the Inflation Reduction Act.
The US Treasury has announced significant relaxations to the rules for hydrogen producers aiming to benefit from tax credits in the Inflation Reduction Act (IRA). Under Section 45V of the IRA, clean hydrogen producers can receive up to $3/kg to bridge the cost gap with grey hydrogen and fossil fuels. The initial proposal required matching clean hydrogen plants' operations with renewable electricity production by 2028, but this has been postponed to 2030. Producers must have electrolysers and renewable electricity assets in the same grid region, with renewable power assets being no more than three years old at the start of hydrogen production. A new pathway allows for existing nuclear reactors as electricity sources for hydrogen production. The revisions, following around 30,000 public comments, aim to drive clean hydrogen deployment, create jobs, and maintain the US's position as a global green hydrogen leader. Despite uncertainties surrounding the upcoming Trump administration's stance on hydrogen incentives, legal challenges may emerge if there are attempts to significantly alter the IRA's provisions.
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