Today, U.S. Senator Alex Padilla (D-Calif.) applauded the Department of the Treasury’s final rules governing the 45V clean hydrogen production tax credit. The rules include critical changes to support the successful development of a strong domestic clean hydrogen industry, including California’s Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES) hydrogen hub.
The updates in the final rules follow Padilla and 12 of his Senate colleagues urging the Department of the Treasury to revise its initial guidelines to ensure hydrogen production’s economic viability while achieving its environmental goals. These changes include exempting states like California with existing renewable power mandates from the incrementality requirement; offering more flexibility on timing requirements for matching renewable energy use; including a pathway to demonstrate electricity transfers between regions; and creating an alternative pathway to incrementality for individual nuclear reactors.
“This announcement is a major win for California’s ARCHES hydrogen hub and its mission to produce and utilize renewable, clean hydrogen across the state,” said Senator Padilla. “The new rules will create more green jobs in California and help decarbonize hard-to-reach sectors like ports and heavy-duty transportation. Treasury’s updated guidance also considers California’s advanced climate policies and aligns with the Inflation Reduction Act’s goals by avoiding overly strict regulations on development. As our state wrestles with growing climate threats, I will continue working hard to secure the resources ARCHES needs to deliver cleaner air, good-paying jobs, and lower energy costs to California.”
“We greatly appreciate the Biden Administration’s leadership and collaboration throughout this entire stakeholder feedback process,” said Dee Dee Myers, Senior Advisor to the Governor and Director of the California Governor’s Office of Business and Economic Development. “The final rules create the certainty needed for developers to invest in and build clean, renewable hydrogen production projects in states like California, working within our legally binding policies that cap carbon emissions. These rules will further expedite our efforts to replace diesel in transportation, natural gas in power production and decarbonize agriculture, aviation, maritime, and other heavy industries. Most importantly, this new guidance will help us clean our air, create family sustaining jobs, and keep our nation-leading economy moving.”
“Today’s announcement on the 45V tax credit will accelerate clean energy innovation in California and across the nation,” said Angelina Galiteva, CEO, ARCHES. “We look forward to continuing to collaborate with federal, state and local stakeholders to scale up hydrogen technologies, create jobs, boost local economies, and further solidify California’s role as a global hub for clean energy innovation.”
Senator Padilla has been a strong supporter of the development of clean hydrogen power in California. After securing up to $1.2 billion for the ARCHES hydrogen hub, he toured hydrogen projects at the Port of Oakland last year. In 2023, Padilla and the late Senator Dianne Feinstein sent a letter to Energy Secretary Jennifer Granholm urging the Department of Energy to support the ARCHES clean hydrogen hub proposal as part of its Regional Clean Hydrogen Hubs program.
ARCHES aims to establish a renewable, clean hydrogen market and ecosystem in California by 2030, creating a projected 220,000 jobs in the state and reducing harmful downstream emissions that disproportionately impact underserved communities and accelerate the climate crisis. California published a roadmap to carbon neutrality by 2045, which included a projected 1,700-fold increase in the use of hydrogen across multiple industrial sectors.
