§45V Credit for Production of Clean Hydrogen

Summary

Offers a tax credit for clean hydrogen made at a qualified facility. The credit equals the number of kilograms of qualified clean hydrogen a taxpayer makes during a 10-year window starting when the facility was first placed in service, multiplied by an amount that is a percentage of $0.60 (the $0.60 is adjusted for inflation for the year the hydrogen is produced). The exact percentage depends on the hydrogen’s lifecycle greenhouse gas emissions per kilogram: 20% for 2.5–4 kg CO2e/kg, 25% for 1.5–2.5 kg CO2e/kg, 33.4% for 0.45–1.5 kg CO2e/kg, and 100% for less than 0.45 kg CO2e/kg. Any dollar amounts are rounded to the nearest 0.1 cent. Lifecycle greenhouse gas emissions — emissions counted up to the production point (well-to-gate) using the GREET model or a successor. Qualified clean hydrogen — hydrogen with lifecycle emissions ≤4 kg CO2e/kg that is made in the U.S. or a U.S. possession, made in the taxpayer’s ordinary business for sale or use, and verified by an unrelated party (taxpayers can ask the Secretary for a provisional emissions rate if needed). Qualified facility — a taxpayer-owned plant that makes qualified hydrogen and whose construction begins before January 1, 2028. Other rules: credits are coordinated with certain other tax rules for shared ownership and tax-exempt bonds; no credit if the facility already gets a section 45Q carbon capture credit for that hydrogen; some older plants that are properly modified can get a new 10-year start date tied to the modification. The credit can be multiplied by 5 if the facility meets prevailing-wage and apprenticeship rules and certain timing rules tied to Secretary guidance. The Secretary must issue rules, including how to measure lifecycle emissions, within one year after enactment.