The 45V Hydrogen Tax Credit was created to subsidize the production of “clean” hydrogen. Hydrogen producers have the option of either receiving a credit equal to a specified dollar value per kilogram of hydrogen produced (a production tax credit; PTC) or a tax credit equal to a specified fraction of their capital expenses (an investment tax credit; ITC). These values depend on the life cycle greenhouse gas emissions associated with the hydrogen production and whether or not the hydrogen producer complies with the prevailing wage and apprenticeship requirements in the bill. If a producer is not in compliance with these requirements, the credit is reduced by a factor of five. Since these projects may also be eligible for tax-exempt bonds, if a project receives such financing, the amount of credit is reduced for both the ITC and PTC.
