Clean energy tax credit safeguards could save taxpayers $1 trillion
Peer-Reviewed Publication
Updates every hour. Last Updated: 4-May-2025 19:09 ET (4-May-2025 23:09 GMT/UTC)
A new study in Environmental Research: Energy highlights the need for safeguards to protect taxpayers and the climate from unintended consequences of hydrogen production tax credits. Without these safeguards, hydrogen producers can exploit loopholes to claim substantial credits for "gray" hydrogen,—by blending small amounts of biomethane or waste methane—resulting in three billion tonnes of CO2 emissions and $1 trillion in taxpayer costs over a decade.
The U.S. Treasury’s new regulations, issued on January 3, address these risks by prohibiting feedstock blending and setting technical standards aligned with the study's recommendations. But these loopholes also apply to clean electricity tax credits under Section 45Y, which are currently under review by the US treasury. It is important to raise the issue of these loopholes so that the US Treasury will put in safeguards to prevent clean electricity greenwashing.
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