Infrastructure Alert
(by Jim Curry, Sean McGovern and Lee Banse)
On November 3, 2022, Pennsylvania Governor Tom Wolf approved legislation that will provide up to $50 million of annual tax credits for facilities located in a Pennsylvania regional clean hydrogen hub that use clean hydrogen produced at the hub in manufacturing.[1] The tax credits are available between January 1, 2024 until December 31, 2043, providing up to $1 billion of credits over the life of the program.[2]
The Pennsylvania tax credits complement federal efforts to foster a clean hydrogen industry through the development of regional clean hydrogen hubs. The federal Bipartisan Infrastructure Law, enacted in November 2021, provided $7 billion for the Department of Energy (DOE) to establish between six to ten regional clean hydrogen hubs for the development of a domestic clean hydrogen industry.[3]
Under the new Pennsylvania program, the credits are available to taxpayers who have made a capital investment of at least $500 million to construct a facility in a Pennsylvania regional clean hydrogen hub, have satisfied certain job creation and employment requirements, and who purchase clean hydrogen produced in the Pennsylvania hub for use in manufacturing at the facility.[4] The tax credits will be applied at a rate of 81 cents per kilogram of clean hydrogen purchased.[5] Qualifying taxpayers may also apply for a tax credit of 47 cents per thousand cubic feet of natural gas purchased for use at the manufacturing facility.[6] A qualified taxpayer may assign the tax credits, subject to certain requirements in the statute.[7]
In a press release on the bill, Governor Wolf stressed the role clean hydrogen will play in reducing carbon emissions, and his support for applications for a regional clean hydrogen hub in Pennsylvania. …