Washington, DC (January 3, 2025) — Today the U.S. Treasury Department released its final rule on 45V Hydrogen Production Tax Credit, enabling clean hydrogen producers to secure production incentives and accelerate the U.S. clean energy transition.

Clean hydrogen is widely considered to be an important solution for decarbonizing energy-intensive sectors, such as heavy industry and commercial transport.

The final guidance keeps intact the three pillars proposed by Treasury in December 2023. These would require that new, additional clean energy be generated in the same region and hour that produces the hydrogen to qualify for the $3 per kilogram production credit. It grants new flexibility for each pillar for hydrogen producers while maintaining the three pillars’ core integrity.

Following is a statement from Angela Anderson, Director of Industrial Innovation and Carbon Removal, U.S. Climate, World Resources Institute:

“The final rule ensures that only hydrogen projects produced from zero-carbon energy will qualify for the most generous tax incentives. Hydrogen’s ability to maximize pollution reduction depends on how it is produced, and this rule will incentivize industrial companies to choose cleaner methods of production.

“These rules will encourage industrial companies to adopt a vital clean energy solution that will both slash their pollution and boost their competitiveness. The Treasury Department’s decision to maintain the three pillars while allowing some well-monitored flexibility will help steel, chemicals, refining and other industrial companies scale up clean hydrogen projects that reduce emissions.

“The Treasury Department rules signal to industry leaders and investors that now is the time to launch innovative hydrogen projects that provide reliable energy and feedstock alternatives, particularly for carbon-intensive industries. These tax credits will enable American companies to be competitive in this emerging market, bringing new jobs and cleaner energy to communities.”