KPMG report: Proposed regulations on clean hydrogen production credit and related energy credit
Initial observations and analysis on the proposed regulations
The U.S. Treasury Department and IRS on December 22, 2023, released proposed regulations regarding the credit for the production of clean hydrogen under section 45V, and the associated energy credit under section 48(a)(15).
The proposed regulations are intended to apply to tax years beginning after December 26, 2023 (the date they were published in the Federal Register). Taxpayers may rely on the proposed regulations for tax years beginning after December 31, 2022, and before the date that the final regulations are published, provided that taxpayers follow the proposed regulations in their entirety and in a consistent manner.
The proposed regulations would provide rules for:
- Determining lifecycle greenhouse gas emissions rates resulting from the hydrogen production processes
- Petitioning the IRS for a provisional emissions rate
- Using electricity from certain renewable or zero-emissions sources to produce qualified clean hydrogen
- Verifying production and sale or use of qualified clean hydrogen
- Modifying or retrofitting existing hydrogen production facilities to obtain a new placed in service date for purposes of the credit
- Irrevocably electing to treat part of a specified clean hydrogen production facility instead as property eligible for the energy credit
Read a January 2024 report [PDF 479 KB] prepared by KPMG LLP that provides initial observations and analysis on the proposed regulations.
For more information, contact a tax professional in KPMG Washington National Tax:
Hannah Hawkins | hhawkins@kpmg.com
Katherine Breaks | kbreaks@kpmg.com
Julie Chapel | jchapel@kpmg.com
Kelsey Latham | kcurcio@kpmg.com