Newly Issued Final Regulations For Clean Hydrogen: Key Takeaways

On January 3, 2025, the Treasury Department and Internal Revenue Service (IRS) issued final regulations regarding the clean hydrogen production credit (PTC) under §45V of the Internal Revenue Code (IRC), added by the Inflation Reduction Act (IRA), and the election to treat clean hydrogen production facilities as energy property for purposes of the IRC §48 investment tax credit (ITC). In addition, the Department of Energy (DOE) intends to release a new version of the 45VH2-GREET model and accompanying user manual to assess lifecycle greenhouse gas emissions associated with the production of hydrogen.

Although various concerns raised in the approximately 30,000 comments submitted in response to the proposed regulations issued in December of 2023 were not addressed, the Treasury and IRS have, by the final regulations, made important modifications intended to provide flexibility in certain key areas. Notably, the final regulations provide additional rules by which