US act would introduce credits for hydrogen production

Projects making clean hydrogen could get a tax credit of up to $3/kg if bill survives in current form

The US’ proposed Inflation Reduction Act of 2022 bill, announced last week, will extend tax credits for the hydrogen sector. Projects making clean hydrogen could get a tax credit of up to $3/kg if lifecycle CO₂ emissions are below 0.45kg per kg of hydrogen produced and if labour rules are met. Producers then receive less support on a sliding scale as the emissions intensity of their hydrogen production increases. Hydrogen manufacture that emits more than 4kg of CO₂ per kg of hydrogen produced will receive no support. The compromise ‘July surprise’ announced by Senate majority leader Chuck Schumer and West Virginia Senator Joe Manchin—both Democrats—sets aside $369bn to support climate initia