WHITEHOUSE, MERKLEY, HEINRICH CALL ON TREASURY TO SWIFTLY IMPLEMENT STRICT CLEAN HYDROGEN TAX CREDIT RULES
WHITEHOUSE, MERKLEY, HEINRICH CALL ON TREASURY TO SWIFTLY IMPLEMENT STRICT CLEAN HYDROGEN TAX CREDIT RULES.
Washington, DC – Senators Sheldon Whitehouse (D-RI), Jeff Merkley (D-OR), and Martin Heinrich (D-NM) called on the Treasury Department to urgently produce strict rules for the Section 45V Tax Credit for Production of Clean Hydrogen (45V) that was passed as part of Democrats’ historic Inflation Reduction Act. The senators note in a letter sent yesterday to Treasury Secretary Janet Yellen and Treasury Climate Counselor Ethan Zindler that weak standards for 45V could potentially increase greenhouse gas emissions and set the clean hydrogen economy up for failure.
Wrote The Senators,
Truly clean hydrogen has enormous potential to deliver emissions reductions beyond the reach of other decarbonization technologies, but today those ambitions are undercut by a market that overwhelmingly favors dirty hydrogen. The robustness of 45V can bridge these economics until our decarbonized grid can support a competitive clean hydrogen industry.
“But this same potency presents an enormous risk to our climate safety if we compromise on the standards for 45V.”
The Inflation Reduction Act (IRA) included a suite of clean energy tax credits and other provisions to boost decarbonization technologies in the United States, including the Section 45V Clean Hydrogen Production Tax Credit. Clean hydrogen has the potential to reduce emissions in aviation, shipping, steelmaking, and heavy-duty vehicles, but is still at an early stage of development. The 45V tax credit as designed by Congress aims to jump start innovation in the hydrogen industry to give clean hydrogen an opportunity to compete with conventional “grey” hydrogen.
added the Senators,
We cannot afford the hydrogen tax credit to serve as yet another subsidy for the fossil fuel industry.
“We urge Treasury to implement rules for 45V that accord with the intent of Congress and align with what science tells us is necessary to secure human well-being and planetary health.”
The senators ask Treasury to adhere closely to Congressional intent and implement strict rules for the 45V tax credit. The senators point to the rules governing the European Union’s clean hydrogen economy as a minimum starting point for Treasury’s standards to exceed. They also urge Treasury to design standards around three broad principles – additionality, deliverability, and time-matching – to ensure the environmental integrity of the program.
Senators Peter Welch (D-VT), Elizabeth Warren (D-MA), Bernie Sanders (I-VT), Cory Booker (D-NJ), and Edward Markey (D-MA) cosigned the letter.