SECTION 2. BACKGROUND

.01 Credits for Clean Hydrogen . The § 45V credit is allowable for qualified clean hydrogen produced after 2022 at a qualified clean hydrogen production facility during the 10-year period beginning on the date the facility is originally placed in service. The § 45V credit is calculated by multiplying the applicable amount by the kilograms of qualified clean hydrogen produced based on the lifecycle greenhouse gas emissions rate that results from the production of qualified clean hydrogen. For facilities that do not meet certain prevailing wage and apprenticeship requirements, the applicable amount is determined by multiplying $0.60 per kilogram by an applicable

Bulletin No. 2022–47 483 November 21, 2022

percentage that ranges from 20 percent to 100 percent depending on the lifecycle greenhouse gas emissions rate that results from the production of the qualified clean hydrogen. Therefore, for these facilities the applicable amount ranges from $0.12 to $0.60 per kilogram of qualified clean hydrogen produced. If the qualified clean hydrogen facility meets the prevailing wage and apprenticeship requirements, the credit amount is multiplied by five, resulting in an applicable amount that ranges from $0.60 to $3.00 per kilogram of clean hydrogen produced. ¹ The applicable amount is adjusted annually for inflation.

If a lifecycle greenhouse gas emissions rate has not been determined for purposes of § 45V for hydrogen produced by a taxpayer, then the taxpayer may file a petition for the Secretary of the Treasury or her delegate (Secretary) to determine the emissions rate of the hydrogen.

Qualified clean hydrogen is defined in § 45V to include hydrogen that is produced through a process that results in a lifecycle greenhouse gas emissions rate of not greater than 4 kilograms of carbon dioxide equivalent (CO2-e) per kilogram of hydrogen. To be eligible for the § 45V credit, the qualified clean hydrogen must be produced in the United States within the meaning of § 638(1) of the Code (or a U.S. possession within the meaning of § 638(2)) in the ordinary course of the taxpayer’s trade or business for sale or use. Additionally, the production and sale or use by the taxpayer must be verified by an unrelated party. A taxpayer may not claim a § 45V credit for qualified clean hydrogen produced at any facility that includes carbon capture equipment for which a credit is allowed to any taxpayer under § 45Q for the taxable year or any prior taxable year.

Section 13204(b) of the IRA amended § 45(e) relating to the credit for producing electricity from certain renewable sources

(§ 45 credit) to provide a special exception to the requirement that electricity be sold to an unrelated party to be eligible for the § 45 credit. Electricity produced by a taxpayer after 2022 may be treated as sold by the taxpayer to an unrelated person during the taxable year if the electricity is used during the taxable year by the taxpayer or a related person at a qualified clean hydrogen production facility to produce qualified clean hydrogen. This production and use must be verified by an unrelated third party. Section 13204(c) of the IRA also amended § 48 relating to the energy investment tax credit (§ 48 credit) to allow a taxpayer that owns a qualified clean hydrogen production facility placed in service after December 31, 2022, to make an election to claim the § 48 credit in lieu of the § 45 credit.

.02 Section 45Z, Clean Fuel Produc- tion Credit .

The § 45Z credit is equal to the product of (1) the applicable amount per gallon (or gallon equivalent) with respect to any transportation fuel that is (a) produced by the taxpayer at a qualified facility, and (b) sold by the taxpayer in a manner described in § 45Z(a)(4) during the taxable year, and (2) the emissions factor for such fuel (as determined under § 45Z(b)).

Section 45Z(a)(2) defines the “applicable amount” for any transportation fuel produced at a qualified facility as (A) 20 cents in the case of a qualified facility which does not satisfy certain prevailing wage and apprenticeship requirements, or (B) $1.00 in the case of a qualified facility that satisfies such requirements. ² Section 45Z(a)(3) provides that the amounts listed in § 45Z(a)(2) are increased to 35 cents and $1.75, respectively in the case of a transportation fuel that is sustainable aviation fuel. The applicable amounts will be adjusted annually for inflation. Section 45Z applies to transportation fuel produced and sold after December 31, 2024, and before January 1, 2028.