Today, the U.S. Treasury Department released preliminary guidance to clarify which hydrogen projects will be eligible for the 45V tax credit established by the Inflation Reduction Act.
Jill Tauber, Vice President of Litigation for Climate & Energy at Earthjustice, released the following statement in response:
“We applaud the Biden administration for proposing stringent guidance that recognizes the real impacts of producing hydrogen — an industrial activity that contributes more climate pollution today than the entire nation of Germany. Hydrogen produced by fossil fuels is never a climate solution and tax credits should only go to hydrogen projects that are truly clean.
“Producing hydrogen by splitting apart water molecules uses a tremendous amount of energy, and the benefits of hydrogen are negated when that energy does not come from new renewable energy that is delivered alongside hydrogen production. The draft guidance avoids wasting billions of tax dollars on subsidies for dirty hydrogen production projects that would spike climate and health-harming pollution.
“The Inflation Reduction Act represents the single biggest federal effort to combat the global climate crisis, but its success greatly depends on how it is implemented. We urge the Biden administration to finalize strong guidance that will drive taxpayer dollars towards projects that do not exacerbate climate pollution from power plants or spur more fossil gas drilling.”