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The United States allocates 7 billion in tax credits for nuclear-powered hydrogen

New U.S. tax rules now allow some existing nuclear power plants to qualify for hydrogen production tax credits, targeting 200 MW per reactor at risk of closure and boosting regional projects.

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The U.S. government recently updated the tax rules for Section 45V of the Clean Hydrogen Production Tax Credit. This amendment, part of the 2022 Inflation Reduction Act, extends eligibility to certain existing nuclear power plants, meeting incrementality criteria to strengthen their role in energy transition.

An expanded framework for clean hydrogen

The main objective of this reform is to support plants at risk of closure by allowing them to allocate up to 200 MW of electricity dedicated to producing zero-emission hydrogen. This initiative is particularly welcomed in states where strict emission standards and renewable energy portfolios are already in place. The new rules provide greater flexibility while adhering to legal requirements for clean energy use.

7 billion for regional hubs

With a federal allocation of $7 billion for regional clean hydrogen hubs, ambitious projects are emerging. Among them, the MachH2 Hub in Illinois, spearheaded by Constellation, plans to build the world’s largest hydrogen production unit powered by nuclear energy at the LaSalle Clean Energy Center. These projects combine technological innovation with strategies to reduce greenhouse gas emissions in key industries.

Economic and industrial impact

The regulatory adjustments, resulting from extensive consultations with industry stakeholders, aim to secure investments and provide long-term visibility for hydrogen producers. Industrial players such as Constellation see it as an opportunity to stabilize operations while contributing to U.S. climate goals. This evolution also underscores the United States’ central role in global leadership on green hydrogen.

A sector under scrutiny

The final rules have sparked diverse reactions. While they enable nuclear actors to remain competitive, they impose constraints related to demonstrating incrementality. The economic viability of certain projects will depend on these adjustments and on future electric transmission costs, which are currently under review.

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