Hydrogen industry pleads for easier path to US tax credits
WASHINGTON, March 27 (Reuters) – Some companies planning to use new U.S. tax credits to deploy hydrogen projects urged the Treasury Department this week to ease proposed environmental requirements, warning that they could hinder the nascent industry’s takeoff.
Treasury and the Internal Revenue Service hosted hearings this week on the guidance they released in December governing implementation of the Clean Hydrogen Production, or 45V, tax credit, one of the most lucrative incentives in the 2022 Inflation Reduction Act.
WASHINGTON, March 27 (Reuters) – Some companies planning to use new U.S. tax credits to deploy hydrogen projects urged the Treasury Department this week to ease proposed environmental requirements, warning that they could hinder the nascent industry’s takeoff.
Treasury and the Internal Revenue Service hosted hearings this week on the guidance they released in December governing implementation of the Clean Hydrogen Production, or 45V, tax credit, one of the most lucrative incentives in the 2022 Inflation Reduction Act.
Australian firm Fortescue said the requirements would hurt a project it is pursuing the Pacific Northwest, which won Energy Department support last year.
“This investment would not qualify for the tax credit, because we plan to use a mix of surplus hydropower and other renewables,” Fortescue North America CEO Andrew Vesey told the hearing.
Frank Wolak, president of the Fuel Cell and Hydrogen Energy Association industry group, said the requirements had cooled investor interest in hydrogen projects. The lobby group asked that projects launched before the guidance is finalized be exempted.
Dorothy Davidson, CEO of the DOE-backed Midwest hydrogen hub, asked Treasury to allow projects to source at least 10% of their power from pre-existing zero-carbon sources like nuclear, and also permit the use of renewable natural gas from farms and landfills. The Midwest hub project relies on existing nuclear energy and natural gas.
Meanwhile, some green hydrogen companies and a number of NGOs urged the IRS to keep the requirements in place.
“Weak section 45V rules would undermine both the achievement of the Biden Administration’s climate goals and the credibility of the hydrogen industry,” said Claire Behar, chief commercial officer of Hy Stor, a green hydrogen firm with a project in Mississippi.
Source - Hydrogen industry pleads for easier path to US tax credits
© Thompson-Reuters
