Impactful Changes: Final Guidance on Hydrogen Production Tax Credit in the U.S.
Key Ideas
- The final guidance on hydrogen production tax credit in the U.S. is seen as a positive step towards scaling clean hydrogen deployments.
- The industry association, FCHEA, acknowledges the improvements made in the final rule compared to the initial proposal, including support for renewable natural gas sources.
- Despite its complexity, project developers are encouraged to evaluate the nuances of the rule to apply them effectively, anticipating future discussions on federal tax and energy policy.
- The FCHEA, representing over a hundred organizations, aims to drive support for hydrogen energy and fuel cell technologies, promoting their environmental and economic benefits.
The Fuel Cell and Hydrogen Energy Association (FCHEA) in the United States has responded positively to the U.S. Department of Treasury's final guidance on the hydrogen production tax credit. The President and CEO, Frank Wolak, highlighted the significance of this guidance in providing developers with the foundation to evaluate opportunities for clean hydrogen deployments.
The final rule showed improvements over the initial proposal, taking into account industry feedback. Some key changes include delayed implementation of accounting for electrolytic hydrogen, support for various sources of renewable natural gas (RNG), and the removal of certain requirements for RNG usage. However, the complexity of the rule necessitates thorough evaluation by project developers to ensure proper understanding and application.
While the rule has closed a significant chapter, the industry now looks ahead to engaging with the new Congress and Administration on how federal tax and energy policies can best promote hydrogen development in the U.S. The FCHEA, a key industry association, has been instrumental in advocating for hydrogen energy for over 30 years, providing a unified voice to policymakers and regulators. Their efforts focus on promoting the environmental and economic benefits of hydrogen energy and fuel cell technologies to drive support at both federal and state levels.