Letter on hydrogen: IRA’s reality check

Proposed regulation of production tax credits exhibits many of the complexities and tight definitions contained in EU’s green hydrogen framework

The US Treasury has published proposals on the regulation of hydrogen production tax credits to be offered under the Inflation Reduction Act (IRA). The proposals end months of speculation over the implementation of IRA in the hydrogen sector. Clarity around the definitions of green hydrogen production projects which can qualify for credits will reassure developers and their financial backers and help bring more projects to FID. But the proposals also present a reality check. IRA’s hydrogen support regime has dazzled the industry with offers of a top rate of $3/kg tax credit. Project developers and OEMs such as electrolyser manufacturers have flocked to the US market, pledging substantial inv