WASHINGTON/NEW YORK (Reuters) – The U.S. Treasury Department plans to issue guidance on how to obtain tax credits for hydrogen production under the 2022 Inflation Reduction Act later this week, according to two sources familiar with the matter.
The long-awaited directive would provide a path for hydrogen produced using nuclear power to reach the credits, the sources told Reuters, although details of that plan were not immediately clear.
The issue of whether existing nuclear plants qualify for hydrogen subsidies has been a major sticking point for the rule, with environmentalists saying that only hydrogen produced with new, clean energy sources should be granted such privileges.
One source said the directives would likely be issued on Friday.
A Treasury Department spokesperson said it was working to finalize the guidance and that the agency was considering various requests related to the rules.
“Finalizing rules that will help expand the clean hydrogen industry while implementing the environmental safeguards set forth in the law remains a top priority for Treasury,” Treasury spokesman Michael Martinez said. “In this process, we are carefully considering the numerous comments we received on the proposed regulations.”
In December 2023, the Treasury Department unveiled its proposed rules governing how energy companies would qualify for credits under the law.
The credit would range from 60 cents to $3 per kilogram and would depend on the life-cycle greenhouse gas emissions of the power generation source used to produce hydrogen, the agency said in its draft guidance.
Since then, the country's nearly carbon-free nuclear power producers have lobbied the Biden administration to include existing reactors in the program.
The level of inclusion of nuclear power in the final rules will determine whether it is commercially viable to invest in hydrogen production, one of the sources said.
Some potential guidelines could include a limit on the number of credit-eligible megawatts allowed from existing nuclear power plants used to produce hydrogen, one of the sources said.
