The Internal Revenue Service (IRS) and U.S. Department of the Treasury (Treasury) issued proposed regulations, published in the Federal Register Dec. 26, 2023, applicable to clean hydrogen production facilities.
Notably, the proposed regulations address:
- determining lifecycle greenhouse gas (GHG) emissions rates resulting from hydrogen production processes and how taxpayers may use energy attribute certificates for this purpose;
- petitioning for provisional emissions rates;
- verifying production and sale or use of clean hydrogen;
- modifying or retrofitting existing qualified clean hydrogen production facilities to establish a new original placed-in-service date (using the familiar 80/20 Rule);
- using electricity from certain renewable or zero emissions sources to produce qualified clean hydrogen; and
- electing to treat part of a specified clean hydrogen production facility instead as property eligible for the Section 48 investment tax credit (ITC) in respect of such facility.