USA: final regulations for the 45V clean hydrogen credit — a 4 kg CO₂e/kg H₂ threshold and three pillars

The US Department of the Treasury and the Internal Revenue Service (IRS) issued on 3 January 2025 final regulations for the 45V tax credit for clean hydrogen production, published in the Federal Register on 10 January 2025. Qualifying hydrogen must come from a process with lifecycle emissions of no more than 4 kg CO₂e per kilogram of H₂, and the highest rate of USD 3/kg applies to hydrogen with emissions below 0.45 kg CO₂e/kg H₂.

Structure of the credit

The 45V credit, introduced by the Inflation Reduction Act, depends on emission intensity. The full rate applies only to producers who additionally meet the requirements on wages and practices (prevailing wage and apprenticeship). The higher the lifecycle emissions, the lower the credit rate per kilogram of hydrogen.

Three pillars for grid electricity

The most debated issue concerned electrolysis powered from the grid. The regulations retained the three-pillars principle: additionality (energy from new sources), and temporal and geographical correlation (deliverability). Industry called for the rules to be relaxed, and climate organisations for them to be kept, so that hydrogen does not increase grid emissions.

Flexibilities in the final version

According to law firm commentary (Orrick, King & Spalding), the final version added three routes to meeting the additionality condition: energy from a facility with CO₂ capture and storage (CCS) commissioned no earlier than 36 months before the hydrogen plant, energy from qualifying nuclear power plants, and clean energy from existing facilities in states with qualifying standards (California and Washington). Temporal correlation: the hourly matching requirement for energy attribute certificates (EACs) was pushed back from 2028 to 2030, with annual matching allowed until then (Orrick).

Construction deadline

In the IRA as in force in January 2025 (and repeated in the final regulations), a facility had to begin construction before 1 January 2033; the July 2025 act shortened this deadline to 1 January 2028.

Significance for biogas and hydrogen from biomass

The lifecycle methodology (the GREET model) also covers hydrogen from biomethane and biomass. Low-emission biomethane used for reforming can reduce the carbon intensity of hydrogen, which is why RNG producers are watching this provision as a potential source of demand for renewable gas.

What this means for Poland and Europe

The EU delegated acts under RED II/III define "renewable fuels of non-biological origin" (RFNBO) with similar pillars: additionality, and temporal and geographical correlation. Comparing the two systems shows that the US and the EU are heading towards similar standards but differ in instrument: a tax credit in the US, market obligations in the EU.