FOR IMMEDIATE RELEASE
Contact: Emma Marsano, marsano@therevolvingdoorproject.org
Last week, multiple outlets reported on a leaked draft of forthcoming rules governing the Inflation Reduction Act’s clean hydrogen production tax credit. Reports from Bloomberg and Politico, among others, indicate that Treasury is intending to implement the rules consistent with the law’s green intent.
The draft guidelines purportedly include some provisions sought by climate advocacy groups, which would incentivize an emergent hydrogen industry to produce hydrogen in a way that has the potential to reduce greenhouse gas emissions. Reporting indicates that these rules include limiting the tax credit to “hydrogen-production operations powered by wind, solar or other clean-power projects built within the last three years,” and implementing hourly time-matching requirements in 2028, two years sooner than the EU’s recently released guidance.
The write-ups also noted that corporate actors—including fossil fuel companies, hydrogen production companies, and fossil fuel-friendly trade associations—have seized on this last opportunity to cry wolf about the supposed harms of implementing strict guidance.
Revolving Door Project Senior Researcher Emma Marsano issued the following statement:
“The leaked draft rules suggest that Treasury and the Biden administration plan to implement the ‘45V’ clean hydrogen tax credit consistent with the green intent of the Inflation Reduction Act—to incentivize hydrogen production that contributes to decarbonization. As our Hydrogen Industry Agenda report outlines, a truly ‘clean,’ green hydrogen industry would have narrow, targeted uses in decreasing the climate harms of hard-to-decarbonize sectors, like steel refining and other industrial processes, or long-distance freight.
But because hydrogen production is so energy-intensive, without stringent guidance, it could actually increase greenhouse gas emissions, rather than reducing them. With this in mind, it’s clear that corporate complaints about strict rules stifling the emergence of the ‘clean’ hydrogen industry are dangerously misleading. Implementing loose rules for the tax credit, to encourage hydrogen production for its own sake, would not help address the climate crisis—it would worsen it—but this doesn’t matter to corporations looking to line their own pockets. Treasury should resist this last-ditch round of industry fear-mongering. The success of the administration’s landmark climate legislation depends on it.”