Washington, DC – U.S. Senators Sheldon Whitehouse (D-RI) and Jeff Merkley (D-OR) and Representatives Jamie Raskin (D-MD) and Don Beyer (D-VA) led a letter from 66 members of Congress calling on the Biden Administration to finalize strict rules for the Section 45V Tax Credit for Production of Clean Hydrogen that was passed as part of Democrats’ historic Inflation Reduction Act.
In a letter sent yesterday to Treasury Secretary Janet Yellen, Energy Secretary Jennifer Granholm, EPA Administrator Michael Regan, OMB Director Shalanda Young, National Climate Advisor Ali Zaidi, and John Podesta, Senior Advisor to the President for Clean Energy Innovation and Implementation, the lawmakers urged the administration to quickly finalize the strong proposed rules for 45V that aligned with Congressional intent and would reduce carbon emissions, while ensuring the tax credit supported robust growth in the nascent clean hydrogen industry.
“When Congress drafted the climate provisions of the Inflation Reduction Act, including the Section 45V Tax Credit for Production of Clean Hydrogen, our primary intent was to develop a suite of incentives that would result in substantial emissions reductions. The 45V tax credit is a key part of the IRA, which will help decarbonize hard-to-abate industrial sections. Treasury’s proposed rules for 45V remain critical to ensuring that 45V does not increase net carbon pollution, and we urge Treasury to finalize rules consistent with its proposal,” wrote the lawmakers.
“The U.S. has the chance and is well-suited to stake out a leading position on clean manufacturing; we must not squander this opportunity for short-sighted gain,” added the members. “Treasury’s strong proposed rules demonstrated a commitment to evidence-based policy, and we urge Treasury to maintain this rigor as it finalizes the regulations. Just as we agree that it is important to get clean hydrogen right, we agree that no tax credit is worth compromising our commitment to tackling the climate crisis by pursuing scientific emissions reduction targets.”
The Inflation Reduction Act included a suite of clean energy tax credits and other provisions to boost decarbonization technologies in the United States, including the Section 45V Clean Hydrogen Production Tax Credit. Clean hydrogen has the potential to reduce emissions in aviation, shipping, steelmaking, and heavy-duty vehicles, but is still at an early stage of development. The 45V tax credit, as designed by Congress, aimed to jump start innovation in the hydrogen industry to give clean hydrogen an opportunity to compete with conventional “grey” hydrogen.
In December, the U.S. Treasury Department released proposed regulations on the Clean Hydrogen Production Credit aligned with the three pillars of clean hydrogen production that Reps. Raskin, Beyer and their colleagues expressed support for, with provisions prioritizing additionality, deliverability and hourly time-based matching. These three pillars ensure that hydrogen is generated using new, “additional,” renewable energy sources, not just the limited renewables currently supplying our power grid, that power generated by clean energy reaches hydrogen production projects, and that hydrogen will be produced during the same hours that the clean electricity is being generated.
“A three-pillar framework with strong protections against fossil fuel greenwashing ensures the hydrogen tax credit is part of a solution to this problem by stimulating demand for new sources of clean electricity generation while fulfilling its primary goal of reducing carbon pollution. These rules ensure that we do not subsidize a greenwashed industry that burdens environmental justice communities with toxic pollution,” added the 66 members of Congress.
Senators Ed Markey (D-MA), Bernie Sanders (I-VT), Chris Van Hollen (D-MD), Elizabeth Warren (D-MA), Peter Welch (D-VT), and Cory Booker (D-NJ) joined Whitehouse and Merkley on the letter. Representatives Raskin and Beyer led a group of 58 members of the House of Representatives in signing the letter. Climate Action Campaign, Natural Resources Defense Council, Earthjustice, League of Conservation Voters, Environmental Defense Fund, Union of Concerned Scientists, Sierra Club, and Evergreen Action endorsed the lawmakers’ letter.
The text of the letter is below and a PDF is available here.