The Biden administration on Tuesday pledged to finalize tax cuts for energy projects before the end of the year, teeing up a major decision on clean hydrogen that could impact the growth of the emerging sector for decades to come.
“We recognize that the clean hydrogen industry needs certainty,” Aviva Aron-Dine, a Treasury official performing the duties of acting assistant secretary for tax policy, told reporters Tuesday. “We are working to include appropriate adjustments and additional flexibilities to help grow the industry and move projects forward.”
The hydrogen tax credit known as 45V has been one of the most debated — and delayed — of all credits enacted in the 2022 Inflation Reduction Act.
Treasury’s release of a proposed credit in December last year sparked an outcry from many U.S. companies and some lawmakers who want to produce hydrogen energy with fossil fuels. Environmentalists and some producers say strict emissions rules on hydrogen, an energy source that could power parts of the industrial sector, are needed to ensure the fuel isn’t contributing carbon pollution to the atmosphere.
