Unpublished 45V Guidance Raises Concerns Over Balancing Environmental Mandates and Industry Viability
December 22, 2023: In response to the newly released unpublished guidance on Section 45V of the Inflation Reduction Act (IRA), which outlines the lifecycle of greenhouse gas emissions standards for hydrogen production, industry experts are raising significant concerns. The guidance, aimed at establishing eligibility for the clean hydrogen production tax credit, has been scrutinized for potentially hindering the commercialization of hydrogen in the United States.
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Roxana Bekemohammadi, the Founder and Executive Director of the United States Hydrogen Alliance, criticized the guidance, stating, "The art of environmental rulemaking is to balance mandates with incentives, to balance the 'carrot' and 'stick.' The $13 billion 'carrot' that resulted from the IRA spurred the hydrogen industry significantly, but the 'stick' here, the three pillars, are so stringent that the 'carrot' is out of reach. When that happens to be the case, you fail as a regulator to strike a balance to achieve your ultimate goal. Unfortunately, the Biden-Harris Administration has miscalculated an effective pathway to implementing the hydrogen production incentives, completely missing the intention of the IRA. And with this miscalculation, we see the success of the recently awarded hydrogen hubs also being compromised. The released draft 45V guidance fails to compromise with industry, hindering mass commercialization of hydrogen in this country and ultimately discarding the opportunity to enhance the country's economy, workforce, energy security, and resilience."
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This perspective highlights a growing concern within the industry that the guidelines may be overly restrictive, limiting the potential of hydrogen as a key player in the transition to cleaner energy sources. The stringent requirements outlined in the guidance could pose significant challenges for producers in meeting the necessary standards to qualify for the tax credit, potentially stifling innovation and progress in this crucial sector.
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As the industry navigates these new regulations, the balance between environmental responsibility and economic viability remains a critical point of discussion. The development and implementation of clean hydrogen energy are essential in the fight against climate change. Still, the path to achieving these goals must be carefully considered to ensure the sustainability and growth of the hydrogen industry.
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About the United States Hydrogen Alliance (USHA):
USHA is a 501(c) (6) business trade association of original equipment manufacturers, technology providers, utilities, and public entities. The organization is focused on the accelerated deployment of hydrogen and fuel cell technologies in the transportation sector, including fuel cell electric vehicles in hard-to-electrify applications like trucking, busing, locomotive, aviation, maritime, and off-road equipment. Our association also supports the use of hydrogen in commercial and industrial sectors, including long-term energy storage that supports renewable electricity generation, desulfurization of crude oil, fertilizer production, decarbonization of steel, glass, cement, and other industries that currently require natural gas. USHA assists states in developing impactful, pragmatic, realizable hydrogen and fuel cell policies that can serve this important industry.
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