Industry and policy stakeholders gather to power the future of hydrogen energy at the FCHEA Hydrogen and Fuel Cell Seminar in Long Beach, CA.
By Derek Phelps
Guidance on Section 45V PTC: A Timely Opportunity for Collaboration
The recently released final rule setting out guidance on the Inflation Reduction Act (IRA) Section 45V Clean Hydrogen Production Tax Credit (PTC) comes at a critical juncture for the hydrogen, clean energy, and low-carbon fuels industries. For companies like Twelve, this guidance represents a unique opportunity to shape the future of clean hydrogen solutions. It arrives just in time for attendees of this week’s FCHEA Hydrogen and Fuel Cell Seminar in Long Beach, CA, offering an invaluable chance for collaboration and strategic discussion. Industry leaders will delve into the guidance’s implications, exploring how it can inform future business and investment decisions.
Reinforcing the importance of cleaner feedstocks, renewable energy, and optimized production technologies
Clean Hydrogen is Central to Decarbonization
Clean hydrogen—a cornerstone in decarbonizing sectors like heavy industry, aviation, and shipping—remains central to reducing greenhouse gas emissions. Green hydrogen electrolysis, paired with our CO2 electrolysis technology, is the core process that drives our E-Jet® manufacturing process. The Section 45V PTC introduces performance-based incentives tied to lifecycle GHG emissions, reinforcing the importance of cleaner feedstocks, renewable energy, and optimized production technologies. This guidance from Treasury and the IRS not only clarifies these opportunities but also provides a framework to navigate the complexities of investment and policy alignment.
At the seminar, stakeholders are uniquely positioned to leverage these details to drive innovation and collaboration towards shared goals to grow industry – and jobs
Clarity and Standards to Boost Investor Confidence
By emphasizing accuracy, transparency, and adherence to globally recognized standards, the guidance delivers much-needed clarity. It defines life cycle GHG emissions calculations, ensuring projects align with eligibility criteria while building investor confidence. Treasury’s recognition of Washington as one of the two states meeting the qualifying state pathway criteria further highlights the thoughtful and strategic design of this framework. At the seminar, stakeholders are uniquely positioned to leverage these details to drive innovation and collaboration towards shared goals to grow industry – and jobs.
Speaking of leadership, much credit goes to the Fuel Cell and Hydrogen Energy Association (FCHEA), ably led by the very capable Frank Wolak, whose steady direction—and some might say boundless energy—is akin to a non-intermittent, dispatchable, baseload power resource. Under Wolak’s direction, FCHEA serves as a vital bridge between industry and policymakers, ensuring that stakeholder voices are heard and their input effectively incorporated.
Flexible Incentives and Provisions for a Competitive Edge
The Section 45V PTC’s financial incentives—up to $3 per kilogram of clean hydrogen—will be a significant driver in making clean hydrogen more competitive. Key provisions, such as the two-year extension of the hourly matching transition rule, and the inclusion of interregional deliverability options, enhance the framework’s appeal. Particularly helpful is the ability to use hour-by-hour accounting, which will provide additional investment certainty, as this helps hydrogen producers avoid losing much of the credit value if they cannot procure EACs for a limited number of hours during the year. Additionally, the option to use the 45VH2-GREET Model in effect at the start of construction for the entire 10-year credit period underscores the commitment to creating a predictable and attractive market environment.
Catalyzing Progress: Aligning Industry and Policy for a Low-Carbon Future
As attendees reflect on the guidance, discussions will focus on integrating these provisions into forward-looking projects to ensure emissions reductions are both credible and measurable. The event also underscores the industry’s eagerness to partner with the incoming administration to align on shared policy priorities. From advancing clean energy to balancing climate goals with economic growth, the alignment of industry and government priorities lays a promising foundation for collaboration.
For Twelve and other industry leaders, this week’s seminar represents an essential springboard for innovation and strategic action
The Section 45V PTC is more than a policy milestone; it’s a catalyst for progress. For Twelve and other industry leaders, this week’s seminar represents an essential springboard for innovation and strategic action. By aligning industry initiatives with policy frameworks, the hydrogen sector has a unique opportunity to drive the transition to a low-carbon future. Together, let’s seize this moment to build a foundation for sustainable progress.