This document was prepared by Nicholas E. Buffie (Analyst in Public Finance) and Martin C. Offutt (Analyst in Energy Policy) and published by the Congressional Research Service (CRS) on 31st January 2025.
The Inflation Reduction Act of 2022 (IRA), enacted a new tax credit for the production of “clean” hydrogen. Widespread adoption of hydrogen fuel may reduce economy-wide greenhouse gas (GHG) emissions, especially in sectors that have traditionally proven difficult to decarbonize, such as trucking, steel manufacturing, and cement production. The credit aims to incentivize hydrogen fuel production, but it reduces government revenue, and the IRS implementing regulation generated significant public comment. Given this debate, the 119th Congress may elect to amend the credit.
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