Pathways to commercial lift off | Clean Hydrogen, USA

Pathways to commercial lift off | Clean Hydrogen, USA 

The analysis in this report was completed following the publication of the Notice of Proposed Rulemaking (NPRM) for the clean hydrogen production tax credit (IRA 45V), but prior to the publication of the final rules, which were issued by the United States Treasury Department and Internal Revenue Service on January 3, 2025.

The final rules include provisions that provide increased flexibility and investment certainty for clean hydrogen producers. For instance, compared to the proposed rules, the final rules:  Extend the annual matching transition rule so that producers are not required to match electricity consumption on an hourly basis until 2030, two years later than under proposed regulations; and allow qualifying producers to use hour-by-hour accounting to determine emission rates for electricity rather than an annual average; Add new pathways to demonstrate incrementality, including the use of electricity generated from nuclear facilities that are at risk of retirement and the use of electricity generated in states with robust greenhouse gas emissions caps and clean (or renewable) electricity standards; Include additional pathways using natural gas alternative feedstocks, such as renewable natural gas (RNG) derived from animal manure, wastewater treatment plants, or coal mine methane;

Indicate that hydrogen can use supplier-specific upstream methane emissions rates reported to EPA's Greenhouse Gas Reporting Program starting in 2026, so long as EPA maintains robust reporting requirements; and Allow producers to lock in the version of 45VH2-GREET available when a facility commences construction for the duration of the credit eligibility period

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