Hydrogen and low-carbon fuels could play important roles in reaching economy-wide net-zero emissions, especially for applications in industry, transport, and energy storage. The Inflation Reduction Act (IRA) contains novel production tax credits for clean hydrogen (45V), which can have complex impacts on hydrogen production, electric generation, and emissions. This report describes an analysis using EPRI’s US-REGEN model to quantify potential impacts of the 45V subsidy under scenarios that vary qualification criteria and the scope of the demand response for hydrogen. The analysis indicates that 45V credits could lead to significant deployment of electrolytic hydrogen across all scenarios, while net emissions effects depend on the qualification criteria. Projected fiscal costs imply higher outlay per tonne of CO2 reduced than for other IRA provisions.
Authors Geoffrey J. Blanford and John Bistline