Plug Power says it intends to recognise US federal tax credits for green hydrogen it is producing at a facility in Georgia in its financial results despite rules for the incentives remaining undetermined.
Under the Inflation Reduction Act’s (IRA) 45V clean hydrogen production tax credit (PTC), hydrogen producers can gain up to $3/kg of hydrogen.
Despite rules for producers being proposed by the Treasury last December, the criteria have not been confirmed, with many expecting them to be finalised after November’s presidential election.
In a press release Plug said the tax credit would provide a “meaningful reduction” in its hydrogen fuel costs to customers, which would allow it to “drive overall fuel margin to a break-even run rate by the end of the year.”
The company did not say whether Treasury or Internal Revenue Service (IRS) officials had confirmed its site in Georgia would be eligible under the proposed three pillar rules (see below). H2 View has reached out for more information.
In May, Plug CEO, Andy Marsh, told H2 View he was “certain” the proposed 45V rules would be relaxed.
Read more: Plug Power CEO ‘certain’ 45V hydrogen tax credit rules will be relaxed
Its 15-tonne-per-day plant in Georgia started producing liquid green hydrogen in January for supply to material handling, fuel cell electric vehicle (FCEV) and stationary power customers.
The announcement comes after the company vowed to “bolster” its financial position in 2024, following $1.36bn of net losses of 2023, and ending earlier going concerns.
Read more:Plug Power is dedicated to ‘bolstering financial position’ in 2024 following $1.36bn net loss
45V PTC
Published in late December 2023, the proposed guidance on Section 45V of the Inflation Reduction Act (IRA) set out various requirements that clean hydrogen producers would have to meet to secure PTCs worth up to $3/kg.
For green hydrogen producers, the guidance included the so-called three pillars of additionality and of temporal and geographical correlation.
Read more: US Treasury reveals three pillar requirements for IRA clean hydrogen tax credit
Under those rules, producers will have to source electricity from renewables in the same regional grid, that are no older than three years old at the time of hydrogen production start-up, with producers having to match renewable electricity and electrolyser operation within the same hour from 2028.
Marsh and Plug Power have been openly critical of the proposed 45V rules. The CEO told H2 View, they went against the legislative intent of the IRA.
Previously, the company, among others, described the rules as “overly restrictive” that could “potentially skew the balance between clean hydrogen growth and environmental integrity in the nascent life of this market.”