The Treasury Department’s final rules for “clean” hydrogen tax credits could shape the industry for years to come and set up a critical test on energy policy for the incoming Trump administration.
The guidance released Friday determines which projects are eligible for billions of dollars in incentives under the 2022 Inflation Reduction Act. The rules, known as 45V for their place in the tax code, had been highly anticipated because of disagreement between environmentalists and industry over how to ensure clean hydrogen — which is a central plank of President Joe Biden’s climate agenda — does not spike emissions. Many hydrogen projects have been on hold for months as developers awaited the rule.
“The extensive revisions we’ve made in this final rule provide the certainty that hydrogen producers need to keep their projects moving forward and make the United States a global leader in truly green hydrogen,” said John Podesta, a top climate adviser to Biden.
Most hydrogen today is made with natural gas. Until the announcement, it was unclear which power sources the Biden administration would count as low-carbon hydrogen.
