![Tyson Foods Plant [Photo: Food Manufacturing]](https://southarkansassun.com/wp-content/uploads/2023/08/iStock_1185520857__1_.5e441daa51cca-600x337.jpg)
![Silverado Senior Living Management Inc. [Photo: Los Angeles Times]](https://southarkansassun.com/wp-content/uploads/2023/10/download-6-4-600x337.jpg)
![China's Wuhan Institute of Virology [Photo: Nature]](https://southarkansassun.com/wp-content/uploads/2023/09/d41586-021-01529-3_19239608-600x337.jpg)
New Tax Credits for Hydrogen Projects Face Environmental Requirement Hurdles
Industry Voices Concern Over Proposed Environmental Guidelines for Clean Hydrogen Tax Credit
Some companies in the United States are gearing up to utilize new tax credits to kickstart hydrogen projects, but they’re facing hurdles from proposed environmental requirements. The Treasury Department and the Internal Revenue Service recently held hearings on guidelines issued in December for implementing the Clean Hydrogen Production, or 45V, tax credit. This credit, part of the 2022 Inflation Reduction Act, offers a significant incentive for clean hydrogen production, potentially up to $3.00 per kilogram over a 10-year period. However, there’s contention over the proposed environmental stipulations. The Treasury’s draft requires hydrogen producers to demonstrate the use of clean electricity sourced from the same region and generated around the same time as the hydrogen production. This has sparked concerns among industry players like Australian firm Fortescue, whose project in the Pacific Northwest might not qualify due to its use of a mix of surplus hydropower and other renewables.
READ ALSO: Tax Credit To Unlock Dreams Of First-Time Homebuyers- Sen. Tammy Baldwin Unveils Plan!
Hydrogen Industry Seeks Streamlined US Tax Credit System for Sustainable Growth – Boosting Industry!(PHOTO: getty images)
Flexibility Demanded by Industry Groups Amid Strict Environmental Requirements for Hydrogen Tax Credits
On one side, industry groups like the Fuel Cell and Hydrogen Energy Association are lobbying for more flexibility, arguing that the stringent requirements are dampening investor interest. They propose exemptions for projects initiated before the guidelines are finalized. Conversely, some green hydrogen companies and environmental NGOs are pushing for strict adherence to the rules, stating that leniency could undermine climate goals and the credibility of the hydrogen industry. The debate underscores the delicate balance between incentivizing hydrogen projects and ensuring their environmental sustainability in the fight against climate change.
READ ALSO: 2024’S Electric Ride: A Comprehensive List Of Vehicles Eligible For EV Tax Credit!
