Biden Treasury is Vaporizing Billions in Potential Hydrogen Investments With 45V Rule

In May of last year, I wrote about how U.S. Treasury Department’s then-proposed rules for the hydrogen production tax credit (Internal Revenue Code Section 45V) could impact the Environmental Protection Agency’s (EPA) power-plant rules.

While low greenhouse-gas (GHG) hydrogen was listed as a key technology to decarbonize power-related emissions at the time, EPA reversed course this year, removing the technology from its final rule released late last month.

Here’s how the Houston Chronicle put it: “And in a blow to clean hydrogen developers in Texas and beyond, the EPA dropped language encouraging power companies to burn hydrogen fuel at gas plants after pushback from power companies.”

The reason for the pullback is obvious. The activist-driven draft rules that Treasury published in December make it extremely difficult and costly to qualify for the credit, which means hydrogen will not be produced at the volumes necessary to supply the need. Green hydrogen producers are required to source their power from new zero-emission sources and match their hydrogen production to the carbon-intensity of the grid on an hourly basis.