“Today, the Biden Administration announced it will be publishing its Notice of Proposed Rulemaking for the Clean Hydrogen Production Tax Credit (H2 Credit). NEI is disappointed to learn the Administration plans to adopt a requirement that only new generation adding incremental capacity to the electric grid could be used to produce clean hydrogen for purposes of the H2 Credit. This decision disregards input from industry, labor, and the authors of the Inflation Reduction Act (IRA) and will impede the creation of a clean hydrogen economy, endanger broader decarbonization goals, and destroy opportunities for American workers. The U.S. took a huge step forward in the fight against climate change with the IRA, but the Administration’s decision to advance a proposal inconsistent with the clear language of the law represents a major step back.
The Administration’s proposed rule effectively eliminates all existing clean energy from qualifying for the H2 Credit, instead requiring hydrogen producers to construct purpose-built energy projects for their production facilities. This requirement will make many clean hydrogen projects uneconomic and will create years of delay for the few projects that can move forward in the face of the Administration’s added constraints. The U.S. nuclear fleet is well positioned to propel the U.S. as a global leader in clean hydrogen production, but the Administration’s proposal will undercut the development of a domestic clean hydrogen economy and will bolster the competitiveness of our global competitors.
By explicitly allowing the zero-emission nuclear power production tax credit to be claimed in conjunction with the H2 Credit, the authors of the IRA made clear that existing nuclear facilities are eligible for the H2 Credit.
NEI will continue to engage the Administration to ensure the H2 credit is implemented as clearly intended by Congress. Doing so will ensure nuclear energy can fill its full potential in decarbonizing the hardest-to-abate sectors of our economy and will accelerate progress toward a cleaner energy economy.”
