U.S. President Biden’s landmark climate bill, the Inflation Reduction Act (IRA), includes one of the most generous tax credits for the production of hydrogen and is worth as much as $100 billion. The Treasury is tasked with deciding how the hydrogen production tax credit will be implemented. Guidance on the tax credit is expected by the end of the year.
There are several challenges that the U.S. faces when it comes to building its clean economy using hydrogen fuel, including:
- How the electricity that will be used to make the hydrogen will be accounted for
- The amount of focus on emissions reductions from the outset
- Writing rules that will ensure that the hydrogen produced is actually clean
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