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Inflation Reduction Act Incentives For Hydrogen Are Being Challenged And
Why It Matters

All Documents Related to Section 45V Clean Hydrogen Production Tax Credit Guidance

Announced December 22, 2023

Hear our Executive Director discuss the new 45V guidance with Paul Rodden.

We are thrilled to introduce our new Policy Advocacy 101 Handbook. At the United States Hydrogen Alliance, we strongly believe in the power of advocacy and its role in the growth of the hydrogen industry. With our handbook, you will have access to essential advocacy tools and the knowledge and skills required to champion hydrogen, your organization, and our nation's sustainable future. As a member of the hydrogen industry, your voice matters and is crucial to building a robust and thriving hydrogen economy. Our handbook will help you develop advocacy skills, enabling you to speak up and make an impact. Let's work together to promote the benefits of hydrogen and build a better future. 

Policy Advocacy 101

What is the Inflation Reduction Act (IRA)?

The IRA of 2022 was put into federal law with the intent of curbing inflation. One mechanism implemented to achieve this was to extend tax credits that promote domestic energy production and clean energy. These tax credits were rolled out in 2023.

What is Section 45V of the IRA?

Section 45V - Hydrogen Production Tax Credit of the IRA aims to incentivize clean hydrogen production. The amount of the incentive for the production is based on lifecycle greenhouse gas emissions, in other words carbon intensity of the production process.

Clean Hydrogen Production Tax Credit Structure

Carbon Intensity

0.45 - 0 kg CO2

1.5 - 0.45 kg CO2

2.5 - 1.5 kg CO2

4 - 2.5 kg CO2

Tax Credit Value

$3.00 / kg of H2

$1.00 / kg of H2

$0.75 / kg of H2

$0.60 / kg of H2

Three Pillars

Why does the hydrogen community want to see a change?

The hydrogen industry needs to be able to implement the most cost effective clean hydrogen hubs for America, in order to ensure our great nation has the most robust and resilient energy and transportation systems. For those reasons we believe the three pillars described below will significantly hinder this goal.

What does the U.S. Energy Secretary say about hydrogen?

Policymakers Opposed to the 3 Pillars

Signatures:

Senator Carper (DE)

Signatures:

Senator Capito (WV)

Opposer:

Senator Bob Casey (PA)

Signatures:

Representative Vicente Gonzalez (TX)
Representative Marc A. Veasey (TX)
Representative Lizzie Fletcher (TX)
Representative Henry Cuellar (TX)
Representative Sylvia R. Garcia (TX)
Representative Colin Z. Allred (TX)

Opposer:

Congressman Chris Deluzio (PA)

Signatures:

Senator Maria Cantwell (WA)
Senator Sherrod Brown (OH)
Senator Joe Manchin III (WV)
Senator Richard J. Durbin (IL)
Senator Kirsten Gillibrand (NY)
Senator Patty Murray (WA)
Senator John Fetterman (PA)
Senator Tammy Duckworth (IL)
Senator Kyrsten Sinema (AZ)
Senator Robert P. Casey, Jr. (PA)
Senator Gary C. Peters (MI)

Why does the industry think that the three pillars are dangerous to building out the U.S. hydrogen economy?

Tim Sasseen
Ballard Power Systems
Gabe Olson
BayoTech
Gabe Olson
BayoTech
Dr. Joe Pratt
Zero Emission Industries
Gabe Olson
BayoTech
BayoTech Carbon Intensity

Learn more on BayoTech's page:

Comparing Carbon Intensity in Hydrogen Production

  1. Hydrogen Production and Carbon Emissions: While hydrogen is a clean fuel, its production and delivery involve carbon emissions. The carbon intensity varies based on factors like energy consumption and feedstock source.

  2. Misconceptions About Color Labels: Hydrogen is often labeled by color, representing different production methods. However, these colors don't fully account for carbon intensity across the entire production and delivery process.

  3. Factors Affecting Carbon Intensity: Electrolysis, often associated with "green hydrogen," can have a significant carbon impact depending on the electricity source.

  4. Reducing Carbon Impact: BayoTech’s on-site hydrogen production technology, especially using biomethane from sources like landfill gas, can significantly lower carbon intensity, potentially leading to negative carbon emissions.

45V Hydrogen Production Tax Credits in the News

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