Leaks suggest US 45V guidance will be more stringent than EU renewable hydrogen rules – reports - H2 View

Leaks suggest US 45V guidance will be more stringent than EU renewable hydrogen rules - reports | Policy | H2 View

A reported leak of US Treasury guidance for the Inflation Reduction Act’s (IRA’s) 45V clean hydrogen production tax credit (PTC) suggests it could impose more stringent requirements on green hydrogen producers than EU rules.

The leak, originally reported by Bloomberg and Politico, indicates the Treasury’s guidance might include additionality, geographical and hourly correlation requirements (the three pillars), like those set out in the EU’s Renewable Energy Directive (RED) II delegated acts.

However, if the leak is correct, the Treasury will require electrolyser operators to match electrolysers will renewable energy production on an annual basis from 2027 and an hourly basis from 2028 – earlier than the EU. H2 View has not been able to independently verify the claims.

Under the EU delegated acts, renewable energy generation must take place within the same month as electrolytic hydrogen production until 2030. Thereafter, production must coincide within the same one-hour period as renewable generation.

Read more: The impact of Europe’s renewable hydrogen complexity

While it cannot be confirmed whether the reported rules will come into effect, the reported leak has sparked an array of reaction from hydrogen industry players.

“It is quite perplexing to see the same administration that supported $22.5bn of hydrogen incentives via IIJA (Infrastructure Investment and Jobs Act) and IRA self-sabotage those dollars by severely limiting the IRA tax credit,” said Roxana Bekemohammadi, founder & Executive Director of the US Hydrogen Alliance (USHA).

Bekemohammadi suggested, if the leak is accurate, the 45V PTC will be “useless to industry” while also compromising the viability of the selected hydrogen hubs for $7bn of funding.

Read more: US DOE selects seven hydrogen hubs for $7bn funding

So far, players including the likes of Accelera by Cummins, Plug Power and Chart Industries called on the Biden Administration to offer “pragmatic, forward looking” IRA 45V guidance.

Notably, California’s hydrogen hub – the Alliance for Renewable Clean Hydrogen Energy – previously said requirements of this nature would impact the industry’s ability to reach its full potential.

Read more: US Treasury under pressure for no hydrogen tax credit additionality requirement

Despite the mounting calls from industry for guidance without the ‘three pillars’, the Treasury had been under pressure to ensure the full climate benefits of hydrogen production.

Following the selection of the seven hydrogen hubs, the Biden Administration had come under fire from environmental groups for handing out taxpayer dollars to “extend the life of oil and gas companies,” by funding blue hydrogen projects.

Last month (November 2023), the Green Hydrogen Catapult (GHC) called on US policymakers to include the three pillars to ensure hydrogen defined as clean is produced through processes consistent with European rules.

Speaking to H2 View, Claire Behar, CCO of Hy Stor Energy – a GHC member – said, ““The stakes are very high to ensure that we do get the 45V right and to ensure that the green hydrogen we’re producing does not generate significant carbon emissions, and to ensure that the federal investment and taxpayer dollars are used effectively to reduce carbon emissions.”

Read more: High stakes for 45V guidance to cut emissions effectively, Hy Stor Energy CCO says

It has been suggested the Treasury will officially release the guidance next week.

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