Jan 3, 2025
The U.S. Treasury Department released the final rules for the Section 45V Clean Hydrogen Production Tax Credit, a component of the Inflation Reduction Act designed to spur clean energy innovation and decarbonization efforts.
Sacramento, California — January 3, 2025 — Today, the U.S. Treasury Department released the final rules for the Section 45V Clean Hydrogen Production Tax Credit, a component of the Inflation Reduction Act designed to spur clean energy innovation and decarbonization efforts. While the finalized guidance addresses concerns raised during the comment period, it also underscores the complexities of advancing a transformative energy solution like hydrogen in a rapidly evolving policy landscape.
Key Provisions of the Final 45V Rules:
Incrementality: Electricity is considered incremental if it comes from generators that start operations or increase capacity within 36 months prior to the hydrogen facility's service date. This includes power from nuclear plants at retirement risk and from states with stringent GHG caps and renewable standards, as well as generators that add CCS technology within the same timeframe.
Temporal Matching: To meet the temporal matching requirement, the electricity represented by Energy Attribute Certificates (EACs) must be generated in the same hour as its use by the hydrogen facility, with a transitional period allowing annual matching until 2030.
Deliverability: Electricity fulfills the deliverability requirement if it is generated within the same grid region as the hydrogen facility, with additional pathways for demonstrating electricity transfers between regions based on the Department of Energy's guidelines.
“We look forward to working with the incoming Trump administration to strengthen the framework and ensure America leverages the full potential of hydrogen’s ability to enhance the country’s energy security and resilience. We appreciate the Biden administration clarifying this critical federal tax incentive. The release of this guidance is a step forward for domestic clean hydrogen production.” said Roxana Bekemohammadi, Founder and Executive Director of the United States Hydrogen Alliance (USHA).
Hydrogen is poised to play a transformative role in decarbonizing hard-to-abate sectors such as heavy industry, transportation, and power generation. However, the industry requires a stable and supportive policy environment to thrive. While the 45V credit has created opportunities, challenges remain that could hinder widespread adoption and investment.
USHA’s Commitment and Path Forward: The United States Hydrogen Alliance is committed to the continued growth of the U.S. hydrogen economy by focusing on creating robust state-level incentives that complement federal policies and encouraging synergistic interplay between federal and state policymakers. By taking this holistic approach, USHA aims to provide certainty for affected stakeholders, build regional and local hydrogen economies, and maintain the country’s international lead on hydrogen.
“Our priority is to ensure that hydrogen secures its place as a cornerstone of the American energy landscape,” said Bekemohammadi. “We will collaborate with federal, state, and private-sector stakeholders to address remaining challenges and accelerate hydrogen’s potential to drive economic growth, energy resiliency, and decarbonization nationwide.”
USHA invites stakeholders, policymakers, and industry leaders to join in advancing hydrogen’s role in shaping a cleaner, more sustainable future. Through continued collaboration and innovative strategies, hydrogen can secure its place as a cornerstone of the American energy landscape.
About the United States Hydrogen Alliance:
The United States Hydrogen Alliance is a 501 (c)(6) non-profit association of members advocating for the development, deployment and utilization of clean hydrogen in all 50 states. We serve the hydrogen industry through state and federal policy advocacy, market development, and community building. Our mission is to leverage the unique attributes of hydrogen to reduce emissions across traditional sectors, increase energy resiliency and diversity, enhance local economies and workforces, and protect the nation domestically and abroad.
Press Contact:
Lexi Schnell