Editor's Note:
Pub. L. 117-169 added
Sec. 45V generally effective for hydrogen produced after December
31, 2022, and (as indicated below) amended Sec. 45V(d) by adding par.
(3) effective for facilities the construction of which begins after
the Act's enactment date (Aug. 16, 2022) and par. (4) effective for
modifications made after December 31, 2022.
I.R.C. § 45V(a) Amount Of Credit —
For purposes of section
38, the clean hydrogen production credit for any
taxable year is an amount equal to the product of—
I.R.C. § 45V(a)(1) —
the kilograms of qualified clean hydrogen
produced by the taxpayer during such taxable year at a qualified clean
hydrogen production facility during the 10-year period beginning on
the date such facility was originally placed in service, multiplied
by
I.R.C. § 45V(a)(2) —
the applicable amount (as determined
under subsection (b)) with respect to such hydrogen.
I.R.C. § 45V(b) Applicable Amount
I.R.C. § 45V(b)(1) In General —
For purposes of subsection (a)(2), the applicable amount
shall be an amount equal to the applicable percentage of $0.60. If
any amount as determined under the preceding sentence is not a multiple
of 0.1 cent, such amount shall be rounded to the nearest multiple
of 0.1 cent.
I.R.C. § 45V(b)(2) Applicable Percentage —
For purposes of paragraph (1), the applicable percentage
shall be determined as follows:
I.R.C. § 45V(b)(2)(A) —
In the case of any qualified clean hydrogen
which is produced through a process that results in a lifecycle greenhouse
gas emissions rate of—
I.R.C. § 45V(b)(2)(A)(i) —
not greater than 4 kilograms of CO2e
per kilogram of hydrogen, and
I.R.C. § 45V(b)(2)(A)(ii) —
not less than 2.5 kilograms of CO2e
per kilogram of hydrogen, the applicable percentage shall be 20 percent.
I.R.C. § 45V(b)(2)(B) —
In the case of any qualified clean hydrogen
which is produced through a process that results in a lifecycle greenhouse
gas emissions rate of—
I.R.C. § 45V(b)(2)(B)(i) —
less than 2.5 kilograms of CO2e per kilogram
of hydrogen, and
I.R.C. § 45V(b)(2)(B)(ii) —
not less than 1.5 kilograms of CO2e
per kilogram of hydrogen, the applicable percentage shall be 25 percent.
I.R.C. § 45V(b)(2)(C) —
In the case of any qualified clean hydrogen
which is produced through a process that results in a lifecycle greenhouse
gas emissions rate of—
I.R.C. § 45V(b)(2)(C)(i) —
less than 1.5 kilograms of CO2e per kilogram
of hydrogen, and
I.R.C. § 45V(b)(2)(C)(ii) —
not less than 0.45 kilograms of CO2e
per kilogram of hydrogen, the applicable percentage shall be 33.4
percent.
I.R.C. § 45V(b)(2)(D) —
In the case of any qualified clean hydrogen
which is produced through a process that results in a lifecycle greenhouse
gas emissions rate of less than 0.45 kilograms of CO2e per kilogram
of hydrogen, the applicable percentage shall be 100 percent.
I.R.C. § 45V(b)(3) Inflation Adjustment —
The $0.60 amount in paragraph (1) shall be adjusted by
multiplying such amount by the inflation adjustment factor (as determined
under section 45(e)(2),
determined by substituting “2022” for “1992”
in subparagraph (B) thereof) for the calendar year in which the qualified
clean hydrogen is produced. If any amount as increased under the preceding
sentence is not a multiple of 0.1 cent, such amount shall be rounded
to the nearest multiple of 0.1 cent.
I.R.C. § 45V(c) Definitions —
For purposes of this section—
I.R.C. § 45V(c)(1) Lifecycle Greenhouse Gas Emissions
I.R.C. § 45V(c)(1)(A) In General —
Subject to subparagraph (B), the term “lifecycle
greenhouse gas emissions” has the same meaning given such term
under subparagraph (H) of section 211(o)(1) of the Clean Air Act (42 U.S.C. 7545(o)(1)),
as in effect on the date of enactment of this section.
I.R.C. § 45V(c)(1)(B) GREET Model —
The term “lifecycle greenhouse gas emissions”
shall only include emissions through the point of production (well-to-gate),
as determined under the most recent Greenhouse gases, Regulated Emissions,
and Energy use in Transportation model (commonly referred to as the “GREET
model”) developed by Argonne National Laboratory, or a successor
model (as determined by the Secretary).
I.R.C. § 45V(c)(2) Qualified Clean Hydrogen
I.R.C. § 45V(c)(2)(A) In General —
The term “qualified clean hydrogen” means
hydrogen which is produced through a process that results in a lifecycle
greenhouse gas emissions rate of not greater than 4 kilograms of CO2e
per kilogram of hydrogen.
I.R.C. § 45V(c)(2)(B) Additional Requirements —
Such term shall not include any hydrogen unless—
I.R.C. § 45V(c)(2)(B)(i) —
such hydrogen is produced—
I.R.C. § 45V(c)(2)(B)(i)(I) —
in the United States (as defined in section 638(1)) or a
possession of the United States (as defined in section 638(2)),
I.R.C. § 45V(c)(2)(B)(i)(II) —
in the ordinary course of a trade or
business of the taxpayer, and
I.R.C. § 45V(c)(2)(B)(i)(III) —
for sale or use, and
I.R.C. § 45V(c)(2)(B)(ii) —
the production and sale or use of such
hydrogen is verified by an unrelated party.
I.R.C. § 45V(c)(2)(C) Provisional Emissions Rate —
In the case of any hydrogen for which a lifecycle greenhouse
gas emissions rate has not been determined for purposes of this section,
a taxpayer producing such hydrogen may file a petition with the Secretary
for determination of the lifecycle greenhouse gas emissions rate with
respect to such hydrogen.
I.R.C. § 45V(c)(3) Qualified Clean Hydrogen Production Facility —
The term “qualified clean hydrogen production facility”
means a facility—
I.R.C. § 45V(c)(3)(A) —
owned by the taxpayer,
I.R.C. § 45V(c)(3)(B) —
which produces qualified clean hydrogen,
and
I.R.C. § 45V(c)(3)(C) —
the construction of which begins before
January 1, 2033.
I.R.C. § 45V(d) Special Rules —
I.R.C. § 45V(d)(1) Treatment Of Facilities Owned By More Than 1 Taxpayer —
Rules similar to the rules section 45(e)(3) shall
apply for purposes of this section.
I.R.C. § 45V(d)(2) Coordination With Credit For Carbon Oxide Sequestration —
No credit shall be allowed under this section with respect
to any qualified clean hydrogen produced at a facility which includes
carbon capture equipment for which a credit is allowed to any taxpayer
under section 45Q for
the taxable year or any prior taxable year.
Editor's Note: Sec. 45V(d)(3), below, as added by Pub. L. 117-169, Sec. 13204(a)(2), is effective
for facilities the construction of which begins after August 16, 2022.
I.R.C. § 45V(d)(3) Credit Reduced For Tax-Exempt Bonds —
Rules similar to the rule under section 45(b)(3) shall apply
for purposes of this section.
Editor's Note: Sec. 45V(d)(4), below, as added by Pub. L. 117-169, Sec. 13204(a)(3), is effective
for modifications made after December 31, 2022.
I.R.C. § 45V(d)(4) Modification Of Existing Facilities —
For purposes of subsection (a)(1), in the case of any
facility which—
I.R.C. § 45V(d)(4)(A) —
was originally placed in service before
January 1, 2023, and, prior to the modification described in subparagraph
(B), did not produce qualified clean hydrogen, and
I.R.C. § 45V(d)(4)(B) —
after the date such facility was originally
placed in service—
I.R.C. § 45V(d)(4)(B)(i) —
(i) is modified to produce qualified
clean hydrogen, and
I.R.C. § 45V(d)(4)(B)(ii) —
amounts paid or incurred with respect
to such modification are properly chargeable to capital account of
the taxpayer,
such facility shall be deemed to
have been originally placed in service as of the date that the property
required to complete the modification described in subparagraph (B)
is placed in service.
I.R.C. § 45V(e) Increased Credit Amount For Qualified Clean Hydrogen Production
Facilities
I.R.C. § 45V(e)(1) In General —
In the case of any qualified clean hydrogen production
facility which satisfies the requirements of paragraph (2), the amount
of the credit determined under subsection (a) with respect to qualified
clean hydrogen described in subsection (b)(2) shall be equal to such
amount (determined without regard to this sentence) multiplied by
5.
I.R.C. § 45V(e)(2) Requirements —
A facility meets the requirements of this paragraph if
it is one of the following:
I.R.C. § 45V(e)(2)(A) —
A facility—
I.R.C. § 45V(e)(2)(A)(i) —
the construction of which begins prior
to the date that is 60 days after the Secretary publishes guidance
with respect to the requirements of paragraphs (3)(A) and (4), and
I.R.C. § 45V(e)(2)(A)(ii) —
which meets the requirements of paragraph
(3)(A) with respect to alteration or repair of such facility which
occurs after such date.
I.R.C. § 45V(e)(2)(B) —
A facility which satisfies the requirements
of paragraphs (3)(A) and (4).
I.R.C. § 45V(e)(3) Prevailing Wage Requirements
I.R.C. § 45V(e)(3)(A) In General —
The requirements described in this subparagraph with
respect to any qualified clean hydrogen production facility are that
the taxpayer shall ensure that any laborers and mechanics employed
by the taxpayer or any contractor or subcontractor in—
I.R.C. § 45V(e)(3)(A)(i) —
the construction of such facility, and
I.R.C. § 45V(e)(3)(A)(ii) —
with respect to any taxable year, for
any portion of such taxable year which is within the period described
in subsection (a)(2), the alteration or repair of such facility, shall
be paid wages at rates not less than the prevailing rates for construction,
alteration, or repair of a similar character in the locality in which
such facility is located as most recently determined by the Secretary
of Labor, in accordance with subchapter IV of chapter 31 of title
40, United States Code. For purposes of determining an increased credit
amount under paragraph (1) for a taxable year, the requirement under
clause (ii) of this subparagraph is applied to such taxable year in
which the alteration or repair of qualified facility occurs.
I.R.C. § 45V(e)(3)(B) Correction And Penalty Related To Failure To Satisfy Wage Requirements —
Rules similar to the rules of section 45(b)(7)(B) shall
apply.
I.R.C. § 45V(e)(4) Apprenticeship Requirements —
Rules similar to the rules of section 45(b)(8) shall
apply.
I.R.C. § 45V(e)(5) Regulations And Guidance —
The Secretary shall issue such regulations or other guidance
as the Secretary determines necessary to carry out the purposes of
this subsection, including regulations or other guidance which provides
for requirements for recordkeeping or information reporting for purposes
of administering the requirements of this subsection.
I.R.C. § 45V(f) Regulations —
Not later than 1 year after the date of enactment of
this section, the Secretary shall issue regulations or other guidance
to carry out the purposes of this section, including regulations or
other guidance for determining lifecycle greenhouse gas emissions.
(Added and amended by Pub. L. 117-169, title I, Sec. 13204(a)(1)–(3),
Aug. 16, 2022, 136 Stat. 1818.
BACKGROUND NOTES
AMENDMENTS
2022 — Subsec. (d)(3). Pub. L. 117-169, Sec. 13204(a)(2), amended
by adding par. (3).
Subsec. (d)(4). Pub.
L. 117-169, Sec. 13204(a)(3), amended by adding par. (4).
EFFECTIVE DATE
Sec. 45V, as added by Pub.
L. 117-169, Sec. 13204(a)(1), generally effective for hydrogen
produced after December 31, 2022.
Amendment by Pub. L.
117-169, Sec. 13204(a)(2), effective for facilities the
construction of which begins after August 16, 2022.
Amendment by Pub. L.
117-169, Sec. 13204(a)(3), effective for modifications made
after December 31, 2022.
