Section 45V Clean Hydrogen Production Tax Credit

The Inflation Reduction Act of 2022 created the Sec. 45V tax credit for clean hydrogen produced in the U.S. through the passage of the IRA. The base credit of $0.60 per kg of clean hydrogen can be multiplied by a 5x bonus credit when satisfying prevailing wage and apprenticeship requirements. The percentage of the credit obtained is determined by the lifecycle greenhouse gas content of the clean hydrogen: below 0.45kg CO2e the applicant may receive 100% of the credit value; 0.45 kg-1.5 kg is 33.4%; 1.5 kg-2.5 kg CO2e is 25%; and 2.5 kg-4 kg CO2e is 20%. The credit provides a 10-year window beginning when the facility was originally placed in service, and for which construction of the facility started before 2033.