WASHINGTON/NEW YORK (Reuters) -The U.S. Treasury Department plans to release guidance later this week on how to access tax credits for hydrogen production under the 2022 Inflation Reduction Act, according to two sources familiar with the matter.
The long-awaited guidance will provide a way for hydrogen produced using nuclear energy to access the credits, the sources told Reuters, although details of that plan were not immediately clear.
The question of whether existing nuclear power plants should qualify for the hydrogen subsidy is a major sticking point for the rule, with environmentalists saying only hydrogen produced from new clean energy sources should get these benefits.
One of the sources said the guidelines would likely be released on Friday.
A spokesperson said the Treasury Department was working to finalize the guidance and that the agency was considering several requests regarding the rules.
“Finalizing rules that will help scale the clean hydrogen industry while implementing the environmental safeguards in law remains a top priority for the Treasury Department,” said spokesman Michael Martinez. “In that process, we are carefully considering the numerous comments we have received on the proposed regulations.”
In December 2023, the Treasury Department announced proposed rules that would determine how energy companies would qualify for the credits under the law.
In its draft guidance, the agency said the credit would range from 60 cents to $3 per kilogram and would be based on the life cycle greenhouse gas emissions of the energy-generating source used in hydrogen production.
The country’s nuclear power producers, which are virtually carbon-free, have since lobbied the Biden administration to include existing reactors in the program.
The extent to which nuclear energy is included in the final rules will determine whether it is commercially viable to invest in hydrogen production, the source said.
Some possible guidelines could include a cap on the number of credit-qualifying megawatts allowed from existing nuclear power plants used to produce hydrogen, one source said.
