Venue: Internal Revenue Service/U.S. Department of the Treasury
Proceeding: Notice of Proposed Rulemaking – Section 45V credit for production of clean hydrogen; Section 48(a)(15) election to treat clean hydrogen production facilities as energy property. (IRS-2023-0066)
Date: February 23, 2024
Summary: The success of the 45V clean hydrogen tax incentives will rest with the ability of the nation to dramatically expand its renewable energy output. EPSA members are some of the largest investors in developing and interconnecting new renewable energy resources to produce the emissions-free electricity vital to clean hydrogen production. EPSA’s comments caution that the proposed parameters for “clean” hydrogen have been drawn far too narrowly. Unfortunately, the NOPR envisions a regime that will discourage and create significant barriers to expanding the clean hydrogen industry.
Specifically, the NOPR relies on a dramatic expansion of energy production from new renewable energy sources not already expected to meet future electricity demand outside of clean hydrogen production. EPSA highlights the flaws in assuming that a glut of unobligated renewable energy development will interconnect before the 2032 expiration of the 45V credit, or that it will be easy to propose, finance, permit/site, interconnect, and operate qualified renewables dedicated to clean hydrogen production in that timeframe.
EPSA also highlights the reaction of several Members of Congress following release of the NOPR to demonstrate the frustration among policymakers regarding the NOPR’s narrow parameters.
