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S. 1017: Clean Hydrogen Production Incentives Act of 2021


The text of the bill below is as of Mar 25, 2021 (Introduced).


II

117th CONGRESS

1st Session

S. 1017

IN THE SENATE OF THE UNITED STATES

March 25, 2021

introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to establish a tax credit for the production of hydrogen using electricity produced from renewable energy resources.

1.

Short title

This Act may be cited as the Clean Hydrogen Production Incentives Act of 2021.

2.

Clean hydrogen production credit

(a)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

45U.

Clean hydrogen production credit

(a)

Amount of credit

For purposes of section 38, the clean hydrogen production credit for any taxable year is an amount equal to the product of—

(1)

the applicable amount, multiplied by

(2)

the kilograms of clean hydrogen—

(A)

produced by the taxpayer at a qualified facility during the 10-year period beginning on the date the facility was originally placed in service, and

(B)

sold by the taxpayer to an unrelated person during the taxable year.

(b)

Applicable amount

For purposes of subsection (a)(1), the applicable amount shall be an amount equal to—

(1)

in the case of any facility the construction of which begins before January 1, 2025, $3.00,

(2)

in the case of any facility the construction of which begins after December 31, 2024, and before January 1, 2026, $2.40,

(3)

in the case of any facility the construction of which begins after December 31, 2025, and before January 1, 2027, $1.60, and

(4)

in the case of any facility the construction of which begins after December 31, 2026, $0.

(c)

Clean hydrogen

(1)

In general

For purposes of this section, the term clean hydrogen means hydrogen produced—

(A)

using an electrolyzer for which the electricity used is produced from qualified renewable energy resources, or

(B)

by any other process which has been determined by the Secretary (in consultation with the Secretary of Energy) to have a rate of carbon dioxide emissions per kilogram of hydrogen produced which is equal to or lower than such rate for such production from the process described in subparagraph (A).

(2)

Qualified renewable energy resources

For purposes of this subsection, the term qualified renewable energy resources means—

(A)

wind,

(B)

solar energy,

(C)

geothermal energy (as defined in section 45(c)(4)),

(D)

marine and hydrokinetic renewable energy (as defined in section 45(c)(10)),

(E)

hydropower,

(F)

nuclear energy, and

(G)

any other renewable energy resource that produces electricity without the use of fossil fuels (as determined by the Secretary, in consultation with the Secretary of Energy).

(d)

Qualified facility

For purposes of this section, the term qualified facility means a facility owned by the taxpayer which is used for the production of clean hydrogen.

(e)

Special rules

Rules similar to the rules of paragraphs (1), (3), (4), and (5) of section 45(e) shall apply for purposes of this section.

.

(b)

Conforming amendments

(1)

Section 38(b) of the Internal Revenue Code of 1986 is amended—

(A)

in paragraph (32), by striking plus at the end,

(B)

in paragraph (33), by striking the period at the end and inserting , plus, and

(C)

by adding at the end the following new paragraph:

(34)

the clean hydrogen production credit determined under section 45U(a).

.

(2)

The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:

Sec. 45U. Clean hydrogen production credit.

.

(c)

Effective date

The amendments made by this section shall apply to facilities originally placed in service after December 31, 2020.