additionality

The long-delayed rules around the federal government’s Hydrogen Production Tax Credit (PTC), also known as 45V, had been the subject of heated debate — and lobbying — since passage of the Inflation Reduction Act (IRA) way back in August 2022. But after more than a year of speculation — and with the Biden administration in its last days — the final rulemaking has at last been published. In today’s RBN blog, we’ll look at how the final rulemaking compares with the initial guidelines established in December 2023, detail the key areas where the rules have been made more lenient, and explain why clean hydrogen still faces an uncertain future, while also previewing our first Drill Down report of 2025. 

The Biden administration has placed some big bets on clean hydrogen, seeing it as a replacement fuel for some hard-to-abate industries and putting it at the heart of its long-term decarbonization efforts. But while clean hydrogen has significant long-term potential — backed by major subsidies, including the 45V production tax credit (PTC) — figuring out a path to a greater role in the U.S. energy mix is more complicated than it might seem. The proposed rules around the tax credit have stirred up a hornet’s nest worth of criticism from those who think the guidance might ultimately do more harm than good. In today’s RBN blog, we’ll preview our latest Drill Down Report on the incentives — primarily the 45V tax credit — intended to expand the clean hydrogen industry and examine some of the barriers to significant growth. 

When the Inflation Reduction Act (IRA) was passed into law in August 2022, it earned near-unanimous acclaim from longtime supporters of renewable energy and decarbonization efforts. Industry types also approved of the bill’s focus on incentives to fuel new developments. One of its most ambitious elements was creation of the 45V production tax credit (PTC) for clean hydrogen, a central part of the Biden administration’s efforts to build a clean-energy economy. But while the PTC may have a significant impact on the U.S. energy landscape over the long run, the December 2023 rollout of the proposed rulemaking has generated no small amount of criticism. In today’s RBN blog, we’ll lay out some of the changes that some say should be included in the final rulemaking to help the clean-hydrogen economy make a quick break from the starting gate instead of getting left at the back of the pack. 

The federal government’s Hydrogen Production Tax Credit (PTC), also known as 45V, provides the highest incentives for hydrogen produced using clean sources of power generation, like wind and solar. That might seem like great news for current and potential hydrogen producers looking to take advantage of the credit, since the U.S. has added significant renewable generation capacity in the last several years, but the reality is much different. In today’s RBN blog, we’ll explain how “additionality” fits into the “three pillars” of clean hydrogen, how it would be calculated under the proposed guidance, and some ways the rules might be adjusted to give hydrogen producers and power generators a little more flexibility. 

The Biden administration has placed some big bets on clean hydrogen, seeing it as a replacement fuel for some hard-to-abate industries and putting it at the heart of its long-term decarbonization efforts. All of these bets are backed by a brand-new tax credit. But the goal isn’t just to drive production of more hydrogen — it’s also to make hydrogen in a specific way, with measurable decreases in greenhouse gas (GHG) emissions. That means producing hydrogen that qualifies for the tax credit is going to be a lot easier said than done. The proposed rules include a concept called deliverability — one of the “three pillars” of clean hydrogen — that adds further challenges to producers hoping to cash in on the tax credit and puts into further peril any number of potential projects. In today’s RBN blog, we’ll explain how deliverability works, how it fits into the proposed rules, and the challenges it will pose for hydrogen producers and power generators alike. 

The long-delayed rules around the federal government’s Hydrogen Production Tax Credit (PTC), also known as 45V, have been the subject of heated debate (and lobbying) since passage of the Inflation Reduction Act (IRA) in August 2022. While some industry groups argued for looser guidelines around the PTC that would allow the low-carbon hydrogen industry to grow quickly, others called for a stricter set of rules from the start, arguing that an approach that was too lax would lead to an increase in greenhouse gas (GHG) emissions. In today’s RBN blog, we’ll look at how those newly published rules rely on the so-called “three pillars” of clean hydrogen, how they prioritize production of green hydrogen at the expense of its blue and pink varieties, and explain the rules around temporal matching and why it might be hard to hit the administration’s 2028 target date for implementation.