The US Treasury Department released proposed guidance for the Inflation Reduction Act’s (IRA) clean hydrogen tax credit. The guidance conditions eligibility for this tax credit, an incentive of up to $3/kilogram, on the hydrogen produced using clean power sources. Notably, the guidance enables grid-connected hydrogen projects to qualify for the credit while setting evidence-based guardrails to ensure that public dollars are achieving the emissions reductions required by law.

RMI U.S. Program Managing Director Leia Guccione:

“Thanks to the guardrails proposed by the Treasury Department, the clean hydrogen tax credit will fuel massive industrial growth across America and protect communities from planet-heating pollution — all while creating low-carbon, long-lasting projects. Aligning these rules with international standards encourages global trade and U.S. competitiveness in the clean energy economy. That’s why these standards have strong support from key industry players.”

“We applaud the US Treasury for leading a rigorous process that was inclusive of input from a wide array of stakeholders and comprehensive in its considerations of industry and community needs. They have developed guidance that strikes a thoughtful balance between administrative practicality, intentional market-shaping, and environmental integrity while being responsive to the current needs of the American hydrogen industry.”

Related Article: U.S. Treasury Releases Guidance to Expand Access to Clean Vehicle Tax Credits

RMI Climate-Aligned Industries Managing Director Bryan Fisher:

“The industries that clean hydrogen can transform — steel, shipping, aviation, and fertilizer to name a few— touch nearly every aspect of our lives: where we live, how we move, what we eat. Clean hydrogen is critical in delivering the solutions that will reduce carbon pollution from these sectors. The scale of the technology-neutral hydrogen tax credit and the rules proposed today will provide early movers with the capital and credibility needed to swiftly scale their operations and jumpstart a low-emissions hydrogen economy.  With these incentives, the United States is poised to be a leader in low-emissions hydrogen.”