45V Guidance: Implications for the Future of the Green Hydrogen Industry

U.S. Treasury’s proposed 45V guidance stifles the economics, adoption, and deployment of green hydrogen. The green hydrogen industry needs a longer glide path to implement the hourly time-matching requirement, along with flexibility for first-mover projects to be exempted from the more granular time-matching requirements for the life of the tax credit.

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This fact sheet summarizes a study conducted by Wood Mackenzie and commissioned by ACP that shows the Administration’s guidelines requiring hourly matching starting in 2028 will limit the ability of the green hydrogen industry to get off the ground.

Green hydrogen, produced using renewable electricity, is critical to decarbonizing the U.S. economy. The Department of Energy estimates low-carbon hydrogen can eliminate 10 percent of economy-wide emissions by 2050. While Treasury’s 45V tax credits are intended to catalyze the still-nascent low-carbon hydrogen industry in the U.S., this study finds the Administration’s proposed guidelines will stifle green hydrogen deployment by making it too expensive.

Wood Mackenzie’s analysis finds that ACP’s framework – reflected in our comments to Treasury –  leads to significantly more green hydrogen deployment by 2032 and puts the industry closer to the pathway required to achieve a net-zero emissions economy. Wood Mackenzie also concluded that the annual matching regime for first movers in ACP’s proposal would not lead to additional emissions. In fact, the Treasury proposal is expected to result in higher hydrogen emissions impacts due to the greater adoption of blue hydrogen that results from the lack of green hydrogen deployment.

Discover implications for green hydrogen in this fact sheet.

For more information on the original study, read the press release or download the report.