Policy Update
Summary of section 45V of the IRA for clean hydrogen
Final rules for Clean Hydrogen Production Tax Credit published by the U.S. Department of the Treasury and Internal Revenue Service
Background
Section 45V of the US Inflation Reduction Act (IRA) provides an income tax credit for the production of qualified clean hydrogen. After considering over 30,000 comments and discussions across agencies and experts, the Department of Treasury has finalized the rules, providing clarity on eligibility requirements of various hydrogen production pathways, and the methodology for tax credit evaluation.
How much is the tax credit?
$0.60 X (Amount of clean H2 in kg) X (% based on lifecycle GHG emissions for H2 production)
For qualifying facilities which began construction before Jan 29, 2023, the credit is multiplied by 5.
Lifecycle emissions
Lifecycle emissions include those through the point of production (well-to-gate), to be determined using the “45VH2-GREET” model develolped by Argonne National Lab.
Well-to-gate emissions includes those associated with:
- Upstream steps associated with H2 production
- Upstream methane slip is included.
- H2 production process
- Electricity used by the production facility, to be determined on an hourly basis after Jan 1, 2030.
- Carbon sequestration
An updated version of the “45VH2-GREET” model is available for download.
Eligibility Requirements
- H2 production must result in lifecycle GHG emissions < 4 kg-CO2 / kg-H2
- H2 must be produced in the US
- Provisions for CO2 sequestration, nuclear power plants at risk of retirement, and facilities which use carbon capture and storage.
- H2 production from natural gas also qualify.
Full Report Available to MobilityNotes Members
In 2025, MobilityNotes will have a paid members-only section, with expanded downloadable content, webinars, white papers, international coverage, and more.
For now, subscribe to the free monthly newsletter below.
Sign up here to receive such summaries and a monthly newsletter highlighting the latest developments in transport decarbonization
Recent Posts
Summary of section 45V of the IRA for clean hydrogen
A summary of the final 45V Clean Hydrogen Production Tax Credit, published by the U.S. Department of the Treasury
Addressing high-emitting vehicles in Nigeria
A summary of recent work done on the use of portable equipment to identify high emitting vehicles in Nigeria.
PM E-Drive – A Billion dollar package for electrification in India
A summary of the latest PM E-Drive incentives worth ~ $1.3B announced by the Indian government to increase the uptake of electric vehicles.