Reps. Raskin, Beyer urge Treasury to adopt strong standards for hydrogen tax credit

Published on December 12, 2023 by Dave Kovaleski

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U.S. Reps. Jamie Raskin (D-MD) and Don Beyer (D-VA) are among 46 Congress members who are urging the U.S. Treasury Department to adopt strong climate standards when implementing the Hydrogen Production Tax Credit.

The Clean Hydrogen Production Tax Credit, created by the Inflation Reduction Act, is designed to incentivize and reward new clean hydrogen projects. Environmental groups, consumer advocates, and hydrogen companies have stressed the importance of ensuring hydrogen fuel is produced from clean energy sources, rather than fossil fuels.

“The IRA’s incentives for clean hydrogen and other emerging technologies offer great promise in reducing emissions in difficult-to-decarbonize sectors,” the lawmakers wrote in a letter to U.S. Treasury Secretary Janet Yellen and Climate Counselor Ethan Zindler. “As the administration finalizes rules for the IRA’s 45V Clean Hydrogen Production Tax Credit, we strongly urge you to ensure that the guidance results in a net decrease in greenhouse gas emissions.”

Specifically, the lawmakers expressed support for what they called the three pillars of sustainable hydrogen production. They include:

• Additionality: Hydrogen should be generated using new, “additional,” renewable energy sources, not just the limited renewables currently supplying our power grid. Without this requirement, hydrogen production will significantly increase energy usage and redirect the limited clean electricity towards hydrogen production.
• Deliverability: Power generated by clean energy must be able to reach hydrogen production projects. Without deliverability requirements, clean energy produced in one region will not reach the hydrogen production plant, forcing local and dirtier generators to fill the gap and increase overall emissions.
• Hourly time-based matching: Hydrogen should be produced during the same hours that the clean electricity is being generated. This ensures that hydrogen production does not increase the use of energy from dirtier sources available at other times of day.

They also support preventing heavily polluting fossil fuel-based hydrogen projects from engaging in greenwashing and claiming the 45V credit. In addition, they want to ensure that hydrogen projects accurately account for their total greenhouse gas emissions across their full lifecycles and do not cause spikes in electricity grid emissions and prices.

“As policymakers, we must be attentive to the negative consequences of weak 45V rules for hydrogen production, which would imperil our climate goals and lead to significant U.S. emissions increases, including from Regional Clean Hydrogen Hubs recently announced by the Department of Energy. Hydrogen production is extremely energy intensive, and absent strong rules, clean hydrogen production could result in emissions that are equivalent to running 26 more coal plants, taking us in precisely the wrong direction in our transition to clean, renewable energy,” the lawmakers continued in the letter.

Natural Resources Defense Council, League of Conservation Voters, Sierra Club, Public Citizen, Evergreen Action, Environmental Defense Fund, Union of Concerned Scientists, Earthjustice, National Consumer Law Center, Chesapeake Climate Action Network AF, Climate Action Campaign, Western Environmental Law Center, Appalachian Voices and the Citizens Action Coalition, Electric Hydrogen, EnergyTag, and Synergetic, are all in support of strong standards for the tax credit.