Padilla, Colleagues Urge Treasury to Adjust Guidance to Support Clean Hydrogen Power Development.
Today, U.S. Senator Alex Padilla (D-Calif.) joined 12 of his Senate colleagues in urging the Department of the Treasury to make critical changes to their proposed guidance on the 45V Hydrogen Production Tax Credit to support the successful development of an enduring domestic clean hydrogen industry.
The 45V credit has the potential to be a crucial tool for incentivizing the production and market-viability of renewable hydrogen power, but the current proposed guidance could undermine the intent of the Inflation Reduction Act and hinder California’s green hydrogen economy. The Senators, who were the primary Congressional authors of the 45V credit, urged Treasury to offer alternative compliance pathways to qualify for the credit as well as certain exemptions for states like California that have enforceable clean energy mandates.
The letter comes after Senator Padilla secured up to $1.2 billion for the Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES) hydrogen hub in California to facilitate the production and utilization of renewable, clean hydrogen across the state. The proposed changes would provide important support for California’s ARCHES hydrogen hub and hydrogen hubs across the country after the Bipartisan Infrastructure Law provided $7 billion to build up to 10 hubs throughout the nation.
Alex Padilla (D-Calif.), U.S. Senator, said:
We share and fully support the Administration’s aim to ensure that the 45V credit catalyzes innovation and capital investment without inadvertently causing higher greenhouse gas emissions.
“However, Treasury’s guidance would jeopardize billions of dollars of investment in clean hydrogen projects, render the cleanest forms of hydrogen uneconomical, and imperil efforts to decarbonize hard-to-abate sectors of our economy,” wrote the Senators.
“Simply put, unless revised according to the suggestions below, the proposed guidance will undermine our shared goal of creating an enduring domestic clean hydrogen industry capable of significantly reducing economy-wide carbon emissions,” continued the Senators.
The Senators proposed added flexibility to Treasury’s overly stringent “three pillars” approach to better align economic viability and cost-effectiveness of hydrogen production with environmental preservation.
In addition to Senator Padilla, Senators Tom Carper (D-Del.), Sherrod Brown (D-Ohio), Maria Cantwell (D-Wash.), Bob Casey (D-Pa.), Chris Coons (D-Del.), Tammy Duckworth (D-Ill.), Majority Whip Dick Durbin (D-Ill.), John Fetterman (D-Pa.), Kirsten Gillibrand (D-N.Y.), John Hickenlooper (D-Colo.), Amy Klobuchar (D-Minn.), and Patty Murray (D-Wash.) also signed the letter.
Senator Padilla has been a strong supporter of the development of clean hydrogen power in California. After securing up to $1.2 billion for ARCHES hydrogen hub, he toured hydrogen projects at the Port of Oakland earlier this year. Last year, Padilla and the late Senator Dianne Feinstein sent a letter to Energy Secretary Jennifer Granholm urging the Department of Energy to support the ARCHES clean hydrogen hub proposal as part of its Regional Clean Hydrogen Hubs program.
ARCHES aims to establish a renewable, clean hydrogen market and ecosystem in California by 2030, creating a projected 220,000 jobs in the state and reducing harmful downstream emissions that disproportionately impact underserved communities and accelerate the climate crisis. California published a roadmap to carbon neutrality by 2045, which included a projected 1,700-fold increase in the use of hydrogen across multiple industrial sectors.
READ the latest news shaping the hydrogen market at Hydrogen Central
Padilla, Colleagues Urge Treasury to Adjust Guidance to Support Clean Hydrogen Power Development. source
