Treasury guidance on 45V was delayed until at least October. We believe the Podesta-led White House team charged with implementing the IRA probably had aggressive targets for additionally, regionality, and matching, but likely received pushback, forcing a rethink.

The pre-publication version of Buy America requirements was released a several days ago. The rules could drive up the price of manufactured products – especially those that contain precious metals only available outside the U.S.

Rystad Energy, a consultancy, released a list of the hubs it predicts are most likely to receive funding. As expected, the list contains the strongest applicants from each geographic region.

45V Guidance Delayed Until October or Later

The one year anniversary of the Inflation Reduction Act – and the deadline for guidance on 45V – came and went on August 16, 2023 without an announcement by the Department of the Treasury.

Writing for Heatmap.news, Emily Pontecorvo and Robinson Meyer broke the news that an anonymous source “familiar with the process” stated that IRS guidance on 45V will be released no earlier than October.

This was echoed by Resources for the Future, several days later.

According to RFF Fellow Aaron Bergman, “Treasury recently delayed the release of this guidance until October, leaving the hydrogen industry waiting and in need of regulatory certainty to start its investments.”

Section 45V specifies the carbon intensity allowed for clean hydrogen producers to claim the hydrogen production tax credit (PTC), which can be worth up to $3.00/kg. Ultimately, the carbon intensity of hydrogen hinges on the definition of renewable energy.

Industry, trade groups, elected officials, and environmental organizations have engaged in vigorous debate over key details on additionally, regionality, and time-matching in the definition of renewable energy.

Our analysis is that the Podesta-led White House team charged with implementing the IRA probably had aggressive targets for additionally, regionality, and hourly-time matching, but has received so much pushback from industry and influential Dem politicians that it’s been forced back to the drawing board.

Buy America Rules Released

The pre-publication version of Buy America requirements was released a several days ago.

Each agency is charged with implementing it in ways that make sense within that sector or industry, so we’ll have to continue to wait to see what DOE says about hydrogen electrolyzers, or other specific technologies. However, it looks very clear that final assembly alone won’t come close to meeting Buy America requirements.

BABA requires Federal agencies to ensure that all of the iron, steel, manufactured products, and construction materials used in federally funded infrastructure projects are produced in the U.S.

p. 17

The cost of the components of the manufactured product that are mined, produced, or manufactured in the United States is greater than 55 percent of the total cost of all components of the manufactured product

p. 154

The 55% price requirement for manufactured products could drive inflation of American-made components. Particularly for products like PEM electrolyzer, which contain expensive precious metals like platinum and iridium that are almost exclusively mined overseas.

Predictions Emerge for Possible H2Hub Winners

Hydrogen Hub news is heating up. According to Hydrogen Insight, Rystad Energy, a consultancy, released a list of the hubs it thinks are most likely to receive funding.

As expected, the list contains the strongest applicants from each geographic region. We’ve heard through solid sources that at least one of the Hydrogen Hubs on the Rystad list currently has representatives in DC negotiating with the DOE on their final award amount. We’ve heard of several others on the list – and at least one hub not on that least – that have been invited to DC by DOE to answer questions.

Although some hubs have representatives in Washington now, selection is still potentially in flux. Hydrogen Hubs are in an all-out PR blitz during the final push. In the last week, HALO, ARCH2, and MACH2 have all put out media meant to strengthen their cases.

The ARCH2 Hub (West Virginia, Ohio, Pennsylvania, and Kentucky) campaigned on the strength of its Mountaineer GigaSystem project. The HALO hub (Arkansas, Louisiana, and Oklahoma) signal boosted Rystad’s predictions.