Biden Administration Finalizes Hydrogen Tax Credit Rules to Boost Clean Energy Transition

The new framework incentivizes low-carbon hydrogen production while addressing industry concerns about cost and feasibility.

The Treasury Department released final rules for the hydrogen tax credit under the Inflation Reduction Act, offering up to $3 per kilogram for low-emission hydrogen production.
The rules aim to reduce greenhouse gas emissions by promoting hydrogen made with renewable energy, nuclear power, or carbon capture technologies.
Environmental groups cautiously praised the framework but raised concerns about potential loopholes that could benefit higher-emission hydrogen production methods.
The finalized guidelines include provisions for hydrogen projects powered by existing nuclear plants and fossil fuel facilities equipped with carbon capture systems.
The rules establish lifecycle emissions tracking and a shift to hourly clean energy matching by 2030 to ensure hydrogen production aligns with decarbonization goals.