On December 22, the U.S. Treasury Department proposed guidance for the 45V Green Hydrogen Production Tax Credit as provided in the Inflation Reduction Act. Hydrogen can decarbonize industries that use heavy machinery by using clean renewable energy sources such as solar power to produce hydrogen.
The 45V tax credit provides up to $3 per kilogram of hydrogen for projects with low lifecycle greenhouse gas emissions and is implemented in conjunction with other hydrogen projects, such as the Department of Energy's Regional Clean Hydrogen Centers program. The project is an investment of $ 7 billion to facilitate nearly $50 billion in hydrogen investment in seven selected centers. The proposed rule for
claiming the 45V tax credit clarifies how green hydrogen producers should calculate a project's lifecycle GHG emissions using 45VH2-GREET, a version of the DOE's well-established R & D GREET model, which is tailored specifically for hydrogen producers seeking this tax credit. It also proposes a procedure for producers to apply for a Provisional Emission Rate (PER) if their production process is not already included in the 45VH2-GREET model.
"We are pleased to see this key guidance that will help drive demand for domestic solar manufacturing." Mike Carr, executive director of the Solar Energy Manufacturers for America , said, "We particularly appreciate the thoughtful approach taken by the Biden-Harris administration." Find a middle ground for industry stakeholders on additionality, deliverability and hour matching requirements that we believe will meet our shared climate goals while allowing this industry to evolve. As builders of the nation's cheapest new electricity sources, U.S. solar manufacturers, along with our partners in the energy storage industry, stand ready to help deliver the affordable, zero-carbon electricity needed to make hydrogen a real climate solution. Consistent with a three-pillar approach, the Inflation Act maximizes U.S. clean energy production and supports the clean energy transition. The proposed rule for
claiming the 45V tax credit also proposes rules regarding hydrogen production by electrolysis to ensure that the electricity used is less than maximum emission intensity in the regulations. The guidelines recommend that hydrogen producers be required to use an Energy Attribute Certificate (EAC) with certain characteristics to assess and document their eligibility for certain tax credit levels. Specifically, the guidelines suggest that the EAC must be representative of the amount of electricity generated, that is,
to match the time during which the electrolyzer is in operation, starting annually and then transitioning to hourly as the tracking system improves; Deliverable
to Electrolyser – Located in the same grid area as described in the NPRM and GREET documents and based on the Department of Energy's National Transmission Demand Study 2023;
compared to the incremental amount of existing generation, such as from new clean power plants.
These three requirements are consistent with legally mandated life-cycle emissions accounting. A press release from the Biden-Harris administration noted that without these requirements, hydrogen production could increase grid emissions.
"While we have been eagerly awaiting the Administration's proposal on the Clean Hydrogen Production Tax Credit 45V guidance, we are concerned about the lack of flexibility in the proposed rule and the impact it could have in jump-starting the hydrogen industry on a large scale." " As our analysis of E3 shows, the annual matching accounting approach can help unlock America's emerging clean hydrogen industry and accelerate our energy transition," said Ray Long, president and CEO of the American Council on Renewable Energy (ACORE). ACORE will continue to work with the administration, and we remain hopeful that the final rule will be issued with the flexibility needed to support the scale and role that hydrogen can play in meeting our decarbonization goals.
(Translation and collation of digital new energy DataBM. Com)
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