Since the passage of the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, hydrogen development has centered around decisions federal regulators in Washington, D.C., would create to determine eligibility under the Clean Hydrogen Production Tax Credit, also known as 45V. In the two years since the Inflation Reduction Act was passed, project developers have been stuck in a state of limbo and uncertainty because the Department of the Treasury has not yet released its final guidance for the 45V incentives.
The draft guidance released in December 2023 received lukewarm reception due to what many across the hydrogen value chain, including officials within the Department of Energy, viewed as more stringent requirements than is currently needed at this early stage of hydrogen’s development.
While these rules, which should come by the end of the year, are important to ensuring hydrogen has a low carbon intensity and contributes to emissions reduction targets, this dominant nationalized narrative around bureaucratic decision-making and what qualifies as “clean” hydrogen from long-standing hydrogen critics ignores the real story playing out on the ground in states across the country.
In Colorado, we are working with leaders in the state government to ease the transition to a clean transportation sector. To bridge the gap between electric vehicle and refueling infrastructure costs, the state has created the Clean Transit Enterprise, the Clean Fleet Enterprise and the Community Access Enterprise. They will use more than $730 million to fund transportation projects that will enable sustainable and decarbonized mobility.
In 2023, Colorado even passed its own hydrogen production tax credit to attract investments, which will help provide an even more attractive market for projects when combined with the federal 45V tax credit. A hydrogen producer in Colorado could receive an additional credit up to $1 per kilogram for clean hydrogen in “hard-to-decarbonize” sectors of the economy, including heavy-duty vehicle transportation.
We are also leveraging federal programs that are not caught in red tape to put steel into the ground. Through the U.S. Department of Transportation’s Charging and Fueling Infrastructure program, Colorado State University and New Day Hydrogen were awarded $9 million to build three hydrogen refueling stations along Interstate 25 in Fort Collins, Denver and Pueblo. The stations are scheduled to open later next year. While these stations will start by refueling medium- and heavy-duty vehicles, they will also fuel passenger vehicles in the future.
Coloradans have long recognized the benefits of providing drivers more than just electric vehicles, and our state policies recognize that. Customers with reservations about battery vehicles’ capabilities should have the choice to buy a hydrogen-powered fuel cell vehicle. The three I-25 stations are the first step in Colorado’s development of a statewide refueling network and a means to guarantee the option of longer drive ranges and faster refueling in a region with challenging terrain.
If net-zero by 2050 is the end goal of federal policymakers and climate advocates, we need to advance all the solutions available to meet those ambitious goals. The clean energy transition will not be a race filled with perfect solutions, but a marathon of innovations. Hydrogen will be a foundational solution in that transition, with the potential to reduce emissions by 20% by 2050 globally.
Colorado has made significant progress over the past few years with its development of supportive hydrogen policies and infrastructure. Federal and state governments need to follow our lead and lean into hydrogen development faster.
A two-year wait time for federal tax regulations is far too long and results in delaying projects from beginning construction due to uncertainty. No matter where the new administration lands on the final 45V regulations, it can be changed as soon as next year when the new president assumes office.
To commemorate our progress in recent years, the Colorado Hydrogen Network hosted the first Colorado Hydrogen Day on Oct. 6 at the Colorado State University Spur Hydro Building in Denver. Attendees of the all-day event viewed hydrogen-powered equipment that are already operating in the state and met the companies, state agencies and environmental advocates that are making a clean hydrogen future a reality in Colorado.
The Centennial State must continue its hydrogen momentum and provide a template that other states can follow to bring economic growth, jobs, improved air quality and lower greenhouse gas emissions to their citizens.
Brian DeBruine of Evergreen is co-director of the Colorado Hydrogen Network, a nonprofit advocacy organization seeking to promote hydrogen and fuel cell technology.
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