Foley & Lardner LLP partner Kyle Hayes commented in the Bloomberg Law article, “Zero-Carbon Hydrogen Tax Rules Spark Divide Over Grid Emissions,” offering insight on how the hydrogen industry is approaching proposed final rules governing a new production tax credit for clean hydrogen.
Hayes said that the 45Q carbon capture tax credit increased by the Inflation Reduction Act could be attractive for producers interested in investing in projects that leverage blue hydrogen, sourced from natural gas paired with carbon capture equipment. He noted that would-be operators of hydrogen facilities are currently “taking a closer look at how 45Q might pencil out instead.”
“I don’t want to definitively say the whole industry is turning their heads in the direction of blue hydrogen, but I do think that certainly some of the strategics who were already thinking about 45Q as a path forward are definitely looking at it more,” Hayes added.
