Alerts9.13.23
U.S.’ National Clean Hydrogen Strategy Is Knocking and the IRS Is Holding the Keys to the Kingdom
Highlights
- The U.S. has made extraordinary progress toward developing and implementing the National Clean Hydrogen Strategy in a few short years, moving from concept to appropriation, public-private planning, and interagency coordination, and more recently toward selection, funding and construction of regional clean hydrogen hubs
- The looming impediment to further progress is the IRS delay in issuing guidance on the qualification for and calculation of Section 45V Clean Hydrogen Production Tax Credits and the applicable definition of clean hydrogen
- It is important for the IRS to issue guidance on Section 45V as soon as possible, as that direction may have significant effects on the economic viability of proposals for green hydrogen production, and the amount of emission reductions that can be realized
The development of the domestic market for clean hydrogen is central to achieving the Biden administration’s goal of a 100 percent clean electrical grid by 2035 and net-zero carbon emissions by 2050. In June 2023, the administration launched a three-pronged National Clean Hydrogen Strategy and Roadmap with a goal of achieving affordable clean hydrogen for a net-zero future and a sustainable, resilient and equitable economy:
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