The American Chemistry Council (ACC) issued the following statement after submitting comments to the Internal Revenue Service in response to the Section 45V Clean Hydrogen Production Tax Credit Notice of Proposed Rulemaking.
“The chemical sector is a primary source of hydrogen today and a promising sector for lower-emissions hydrogen production and use in the future. Chemistry companies can build on their deep process expertise, existing commercial and distribution channels, and opportunities to build new markets. As part of a diverse U.S. energy portfolio, hydrogen can help reduce emissions in manufacturing and beyond.
“The Inflation Reduction Act’s (IRA) 45V tax credit and the Bipartisan Infrastructure Law’s (BIL) Regional Clean Hydrogen Hubs (H2Hubs) program are essential catalysts for rapid, nationwide investment in a lower-emissions hydrogen economy. This build-out is important to ACC member companies and critical to achieving meaningful progress on the Biden administration’s climate goals.
“Our comments highlight principles for effective implementation of Section 45V and other IRA/BIL programs. These include support for diverse sources and processes, including all forms of lower-emissions hydrogen production technologies; regulatory certainty to enable timely investment decisions; access to infrastructure, feedstocks, and innovative chemistries; and complementary policies for building out a lower-emissions electric grid.
“Projects should be allowed and encouraged to refine the default assumptions in the 45VH2-GREET model with valid data, which would help incentivize innovation and emissions reduction. The administration must guard against regulatory overreach in interpreting its Section 45V tax credit authority.
“We look forward to engaging with the administration regarding ways to address industrial emissions reduction through opportunities provided by the IRA, BIL, and other authorities. The chemistry industry is an essential stakeholder and future partner in these efforts.”
The Clean Hydrogen Production Tax Credit provided in Section 45V of the IRA is a federal government incentive for companies to generate green hydrogen, a source of renewable energy. The Federal Register states “the proposed regulations would provide rules for: determining lifecycle greenhouse gas emissions rates resulting from hydrogen production processes; petitioning for provisional emissions rates; verifying production and sale or use of clean hydrogen; modifying or retrofitting existing qualified clean hydrogen production facilities; using electricity from certain renewable or zero-emissions sources to produce qualified clean hydrogen; and electing to treat part of a specified clean hydrogen production facility instead as property eligible for the energy credit.”
A clean hydrogen infrastructure has been an increasing focus globally and in the United States to reduce greenhouse gas emissions. The U.S. government has earmarked $7 billion to subsidize the development of hydrogen hubs across the country.