U.S. Senator Bob Casey (D-PA) has voiced concerns over the Biden Administration’s proposed rule for the 45V hydrogen production tax credit. The proposed rule, aimed at jumpstarting clean hydrogen production across the U.S., has been met with criticism for its potential impact on Pennsylvania’s energy sector.
The 45V clean hydrogen production tax credit was established under the Inflation Reduction Act to stimulate clean hydrogen production throughout the United States. However, Casey expressed apprehension that the proposed rule could impede Pennsylvania’s participation in the Mid-Atlantic Clean Hydrogen Hub, the Appalachian Regional Clean Hydrogen Hub, and other innovative hydrogen projects. He further stressed the potential impact on Pennsylvania workers and businesses, emphasizing the need for the Administration to consider Pennsylvania’s readiness to lead in hydrogen power.
On Friday, the Biden Administration proposed stringent rules for the 45V hydrogen production tax credit. The Department of the Treasury issued a Notice of Proposed Rulemaking proposing rules for claiming the § 45X Advanced Manufacturing Production Tax Credit—an incentive created by the Inflation Reduction Act. The credit supports clean energy manufacturing by providing tax credits for manufacturers of clean energy components produced in the U.S. and sold in or after 2023.
Companies can claim up to $3 per kilogram of ‘clean hydrogen’ they produce if they meet certain labor standards. To qualify, ‘clean hydrogen’ must produce no more than 4 kilograms of CO2 per kilogram.
However, the proposed rule has encountered opposition. Sen. Joe Manchin (D-WV) criticized the Treasury Department’s new tax credit system for hydrogen production, arguing that it would impose undue restrictions on the emerging market.
As the debate unfolds, Senator Casey stated that he remains committed to advocating for Pennsylvania’s role in the nation’s clean energy future, pledging to continue pressing the Administration to adjust the rule to better suit the state’s energy sector.
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