US to difficulty hydrogen credit score rule this week, with path for nuclear, sources say

WASHINGTON/NEW YORK (Reuters) -The U.S. Treasury Division intends to launch steering on tips on how to entry tax credit for hydrogen manufacturing beneath the 2022 Inflation Discount Act later this week, in keeping with two sources accustomed to the matter.

The long-awaited steering will present a pathway for hydrogen produced utilizing nuclear energy to entry the credit, the sources informed Reuters, although the main points of that plan weren’t instantly clear.

The query of whether or not present nuclear crops must be eligible for the hydrogen subsidy has been a serious sticking level for the rule, with environmentalists saying that solely hydrogen produced with new clear vitality sources must be granted the perks.

One of many sources stated the steering would probably be launched on Friday.

A spokesperson stated the Treasury Division was working to finalize the steering and that the company was contemplating numerous requests associated to the principles.

“Finalizing guidelines that can assist scale the clear hydrogen business whereas implementing the environmental safeguards established within the legislation stays a prime precedence for Treasury,” stated spokesperson Michael Martinez. “In that course of, we’re fastidiously contemplating the quite a few feedback we have now acquired on the proposed laws.”

In December 2023, the Treasury Division unveiled its proposed guidelines governing how vitality corporations would qualify for the credit beneath the act.

In its draft steering, the company stated the credit score would vary from 60 cents to $3 per kilogram and be based mostly on the life-cycle greenhouse fuel emissions from the power-generating supply utilized in hydrogen manufacturing.

The nation’s producers of nuclear energy, which is just about carbon free, have since lobbied the Biden administration to incorporate present reactors in this system.

The extent of any inclusion of nuclear energy within the ultimate guidelines will decide whether or not it is commercially viable to spend money on hydrogen manufacturing, one supply stated.

Some attainable pointers might embody a restrict on the variety of credit-qualifying megawatts allowed from present nuclear energy crops utilized in hydrogen manufacturing, one supply stated.