While hydrogen has the potential to accelerate the clean energy transition and the new rules provide additional flexibility, Durbin said launching an entirely new industry won’t happen without government policy that attracts the necessary investment.

“The final 45V rule falls short,” said Durbin.

“The incoming Administration will have an opportunity to improve the 45V rules to ensure the industry will attract the investments necessary to scale the hydrogen economy and help the US lead the world in clean manufacturing.”

Much of the reaction has focused on whether the new Republican Administration will implement the rules.

Beth Trask, Vice-President, Global Transition, at the Environmental Defense Fund, said risks remain that public incentives for clean hydrogen could go toward fossil fuel-based projects that offer no real climate benefit and undermine the integrity of the US hydrogen market.

“Clean hydrogen can help clean up parts of the economy that are hard to decarbonize any other way, but only if we do it right.

“At a minimum, any fossil fuel-based hydrogen projects must accurately measure and report their upstream methane emissions, verify that carbon emissions are captured and securely stored, and rigorously disclose all pollution and avoid accounting tricks that mask impacts.”

She added that blue hydrogen projects can pose health risks to nearby communities that must be carefully evaluated and addressed.

“A strong and stable federal methane policy is essential to begin to address the harmful upstream methane pollution associated with fossil-based hydrogen projects.”

Deepak Bawa, CEO at Splitwaters, said the rules could have been published much earlier, and waiting 12 months after the initial guidelines ‘felt a bit excessive’.

“However, the relaxation in regionality is fantastic news for project developers; it certainly makes things more interesting!” he said. “I’ve noticed that many feel the hourly matching of EAC requirement is unnecessary. Continuing with the annual matching until we achieve a stable stage in green hydrogen production would have been far more beneficial.”

He said he was particularly intrigued by the 4kg of CO2 per kg of H2 target, which seems quite achievable but the devil is in the detail.

“Plus, the change allowing producers to use battery storage to meet hourly requirements adds another layer of flexibility. Additionally, it’s amazing that hydrogen producers can draw up to 200 megawatts from existing nuclear reactors if they meet certain criteria. This opens up so many possibilities for greener energy production!”

Ultimately, it’s clear that the end goal is to reach electrolytic green hydrogen while using Blue hydrogen as a means to reduce emissions wherever possible.

“Now we just need to see how the Trump-Vance administration reacts and what changes they will implement going forward.” 

Crunching the 379-page report, Jason Munster, a former hydrogen and H2Hubs expert at DOE, said getting $3/kg from large reformation facilities is going to be ‘hard or impossible’ – which means there is room for both electrolytic and reformation hydrogen in the US.

He noted that the three pillars remain strict which also makes it difficult for electrolysis to move down the cost curve to be viable without subsidy by 2035, and agreed the hourly averaging for projects ‘seems like it doesn’t help’.

“The risk that litigation could reduce competitiveness versus future projects remains,  this may still have a chilling effect on some investments,” he added. “Most of the document is commentary in preparation for two inevitable lawsuits: one on induced emissions and one on no blending of natural gas.”

Patrick Serfass, Executive Director of the American Biogas Council, said the rules will incentivise production of more renewable hydrogen and recognise the value of renewable natural gas (RNG) as a renewable feedstock for making clean hydrogen.

“The final rules address key issues within the Department’s prior proposal, including removing the first productive use penalty, which effectively treated existing sources of RNG like conventional natural gas. Today’s action more closely aligns with industry standards,” he said.

Kim Hedegaard, Topsoe’s Power-to-X CEO, said the final guidance for the 45V tax credit for clean hydrogen production is a critical milestone in growing the clean hydrogen economy in the US.

“With this added clarity, many projects that have been delayed may move forward, which can help unlock billions of dollars in investments across the country.”