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The new H2 notice, explained

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Apr 16, 2024
Illustration of hydrogen molecules surrounded by dollar elements and abstract shapes

Illustration: Gabriella Turrisi/Axios

A new notice for comment on the hydrogen tax credit could be an industry lifeline.

Why it matters: Hydrogen producers may be able to use the IRA more easily if they generate power on-site instead of relying on regional co-located energy sources.

Driving the news: The Treasury Department last week put out a request for comment on the 45V application process for hydrogen producers generating energy on-site.

  • This is a different process from the one that's become divisive in hydrogen land because of its constraints around "additionality" and time-matching.
  • Instead, this proposal seeks more info on "provisional emissions rates" companies can obtain to qualify for 45V if they're generating their own power for hydrogen production.

Between the lines: This separate pathway to 45V is "actually pretty clean and straightforward" compared with the other method, said Scott Stogsdill, an expert on renewable energy incentives at Ryan, the global business tax firm.

  • "If I were building a plant, I would be looking at a way to take advantage of this and stay away from three pillars as far as I could," he told Axios. "It's going to be so much easier in the long term to generate electricity on-site."
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