Treasury Issues Final Guidance on Hydrogen Tax Credits

Media Contact

Josh Mogerman
Managing Director, Media and Public Affairs

The U.S. Department of Treasury released final guidance today for the Inflation Reduction Act (IRA) 45V clean hydrogen tax credits.  

The following is a statement from Erik Kamrath, Hydrogen Advocate at NRDC (Natural Resources Defense Council):  

“The final guidance is an important step towards a truly clean hydrogen industry. The rule provides much needed certainty for the industry and positions U.S. producers to be competitive in the global market.  

“The extra flexibilities granted to the green hydrogen industry are not perfect from a climate perspective. But the rule maintains key protections that minimize dangerous air and climate pollution from electrolytic hydrogen production; while also protecting U.S. taxpayers and electricity consumers. 

“The rule does not guarantee protections against climate harms caused by methane, a potent greenhouse gas emitted from blue hydrogen production. Policymakers must continue to grapple with accounting for methane as better data comes available in the future. Thankfully, the rule prevents dodgy offset schemes that would be enabled by blending different sources of methane. 

“Rigorous implementation of this rule, coupled with robust state policies, will now be required to ensure it follows through on setting up a credible and durable clean hydrogen industry.” 

 
Background:  

This rulemaking builds on the proposal from 2023 and clarifies additional flexibilities to qualify for the credits, including for nuclear power plants at demonstrable risk of retirement and for states with robust GHG emissions caps paired with clean electricity standards or renewable portfolio standards. It also clarifies how emissions from different sources of methane will be separately accounted for, ruling out harmful offset schemes. 

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NRDC (Natural Resources Defense Council) is an international nonprofit environmental organization with more than 3 million members and online activists. Established in 1970, NRDC uses science, policy, law, and people power to confront the climate crisis, protect public health, and safeguard nature. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Bozeman, MT, Beijing and Delhi (an office of NRDC India Pvt. Ltd). Visit us at www.nrdc.org and follow us on Twitter @NRDC. 

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