USA releases long-awaited clean hydrogen framework

The USA has released proposed rules for companies developing clean hydrogen projects under President Joe Biden’s Inflation Reduction Act (IRA), Reuters reported on Friday.

Under the new framework companies will receive tax credits based on the life-cycle greenhouse gas emissions from the energy source used to create hydrogen in ranges between USD 0.60 and USD 3 per kilogram.

To receive the credit, operators will need to prove the use of clean energy sources in the creation of hydrogen within three years of a project being commissioned.

It also stipulates the energy must come from the same region as the project and be generated around the same time as the hydrogen is produced.

Developers will need to prove their source energy is clean per hour.

The suggested rules will be subject to comment and public hearings before being finalised within 60 days of the proposal.

Under the IRA, the USA has set a target to produce 50 million tonnes of hydrogen by 2050.

The act has set aside almost USD 370 billion for tax breaks and subsidies.

According to Rystad Energy, more than USD 11 billion has been committed to green hydrogen projects in the USA.