Sen. Joe Manchin (D-WV) on Friday blasted the Treasury Department's new tax credit system for hydrogen production, saying it will "kneecap" the fledgling market with undue restrictions.
"This administration cannot keep itself from violating the Inflation Reduction Act in their relentless pursuit of their radical climate agenda," Manchin said. "Make no mistake, obstructing hydrogen development in our country is the shortsighted goal of the far-left advocacy groups who lobbied the administration for these restrictions because they oppose all energy sources other than solar and wind."
TREASURY PUTS OUT CONTROVERSIAL GUIDANCE FOR HYDROGEN TAX CREDIT
The hydrogen tax credit "45V," which was created by the 2022 Inflation Reduction Act, incorporates several proposed requirements suggested by environmentalists seeking to use subsidies to spur renewable energy production.
The proposed guidance determines the tax credit based on the amount of carbon emissions emitted through the hydrogen production process. The credit for hydrogen production ranges from between 60 cents and $3 per kilogram of hydrogen, while the highest tax credits are limited to wind, solar, and other renewables built within the first three years of operation for a hydrogen facility.
The guidelines would also mandate hydrogen production to be matched annually with clean power generation until 2027, after which the credit criteria will switch to an "hourly matching" system.
"Today’s proposed rules on the IRA’s hydrogen production tax credit will only make it more difficult to jump-start the hydrogen market, which will be a critical part of our secure energy future," Manchin said.
The centrist West Virginian has repeatedly gone after the Biden administration’s implementation of the IRA, legislation he co-authored, asserting that the White House is misinterpreting the intent of the law while kowtowing to environmentalists’ demands.
Manchin called the restrictions "particularly hypocritical" considering that the Biden administration "has bent, broken, and ignored the law again and again to make it easier to access electric vehicle tax credits."
"Hydrogen has the potential to be the new horsepower of our country and will strengthen our energy security so we are less dependent on foreign adversaries, and crucially, it can be produced carbon-free," Manchin said.
The Biden administration has been investing in the developing hydrogen industry, spending $7 billion in regional hydrogen hubs to accelerate commercial development. The Department of Energy aims to produce 50 million metric tons of clean hydrogen annually by 2050, a fiftyfold increase over the next 26 years.
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The proposed rule will be open for public comment for 60 days, after which time it is unclear when the Treasury Department and the IRS will finalize it.
"Today’s proposed rule doesn’t just violate the law — it makes absolutely no sense, and I will continue to fight this administration’s manipulation of the IRA," Manchin said.