Happy Tuesday! Welcome back to
another week of ESC’s News Blog! We
hope you had a relaxing and long weekend!
Did anyone
happen to read The Houston Chronicle’s Business Section on December 23, 2023,
their article titled, “Rules on hydrogen projects released – White House is
hoping for balance between environment and an untested new industry”? The article was about the U. S. Department of
Treasury and the Internal Revenue Service (IRS) have announced their proposed rules
for the tax credit for clean hydrogen, and they will release it on December 26,
2023. The tax credit may be worth up to
$3 per kilogram for clean hydrogen for up to 10 years. The federal government is in hopes this will
jumpstart the clean hydrogen industry with their goal of it making 50 million
metric tons annually by 2050. The tax
credit known as 45V will be for those who will make either blue or green
hydrogen and the rules to qualify.
There is a
difference between green and blue hydrogen, even though there are several other
kinds of hydrogen which are not included in the new rules. Green hydrogen, the product is made from electricity
generated by wind or solar plants no older than three years old with no fossil
fuels used in its process. Green hydrogen
will split water to get hydrogen which is expected to be the wave of the future,
but at this time it uses large amounts of energy to produce. On the other hand, blue hydrogen is made from
natural gas, but its emissions will need to use carbon capture to make it more
environmentally friendly. The extraction
of natural gas from underground will hamper this tax credit because of the
limits on its emissions, so most likely companies will claim the carbon capture
or 45Q tax credit, which was released earlier this year, and may be worth up to
$85 per ton of carbon dioxide captured and stored. At this time, blue and green hydrogen are considered
clean.
Green and blue
hydrogen have pressure being placed on them due to the desire to reduce emissions
to stop any further climate change. The
45V tax credit is not the only help the new industry is getting from the federal
government. They have federal money
being invested in it through the seven hydrogen hubs around the U.S. with one
being here on the Gulf Coast, and they believe if they invest in clean hydrogen
private industry will follow suit. The new
45V proposed tax credit is only the beginning for its tax rules for this emerging
industry, and the rules are expected to be refined as the industry develops. If you would like to read more of The
Houston Chronicle’s article, please click the link: Biden releases clean hydrogen rules, seeking balance on emissions(houstonchronicle.com).
If you would
like to see the IRS’s Proposed Section 45V Credit for Production of Clean Hydrogen…,
please click the link: Federal Register :: Section 45V Credit for Production of Clean Hydrogen; Section48(a)(15) Election To Treat Clean Hydrogen Production Facilities as EnergyProperty.
If you would
like help in looking into how to update your terminal and pipelines to reduce
your carbon footprint, contact us via email in the blog and check out our ESC's website for contact information!
We hope you have a wonderful evening!
**Disclaimer: You may be charged a fee to read The
Houston Chronicle’s article. **
