IRS Issues Proposed Rules on Clean Hydrogen Production

The IRS and Treasury Department released highly anticipated proposed rules Friday for the tax credit for clean hydrogen production.

The Democrats’ Inflation Reduction Act created a tax credit for hydrogen producers—paying as much as $3 per kilogram of clean hydrogen produced over 10 years.

The proposed rules limit who will be eligible for the credit by taking into account indirect emissions from generating electricity needed to produce the hydrogen. It also provides definitions on lifecycle greenhouse gas emissions, qualified clean hydrogen, and qualified clean hydrogen production facility.

“The proposed rules require companies to use new, deliverable, ...