Sources say that the US will issue a hydrogen credit rule next week with a path for nuclear.

Two sources with knowledge of the situation say that the U.S. Treasury Department will release guidance this week on how to obtain tax credits under the 2022 inflation reduction act for the production of hydrogen.

Sources said that the long-awaited guidance would provide a way for hydrogen produced by nuclear power to be eligible for credits. However, details were not made clear.

Environmentalists have argued that only hydrogen generated with clean energy sources such as solar and wind should qualify for the subsidies.

According to one source, the guidelines are likely to be released this Friday.

A spokesperson stated that Treasury Department is working on finalizing the guidance, and the agency is considering different requests related to the rules.

Michael Martinez, Treasury spokesperson, said that "finalizing rules to help scale up the clean hydrogen industry and implement the environmental safeguards set forth in law remain a top priority." In that process, Treasury is carefully considering all the comments received about the proposed regulations.

The Treasury Department will be closing its doors in December 2023.

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Its proposed rules on how energy companies could qualify for credits under the Act.

The agency stated in its draft guidance that the credit ranged from 60 cents per kilogram to $3 per kilo, and would be based on life cycle greenhouse gas emissions of the power source used for hydrogen production.

Since then, the country's nuclear energy producers, which emits virtually no carbon, have been able to produce virtually zero-carbon power.

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The Biden administration will include existing reactors into the program.

One source stated that the level of inclusion of nuclear energy in final rules would determine whether or not it is commercially viable to invest into hydrogen production.

One source suggested that guidelines might include a cap on the maximum number of megawatts from nuclear power plants currently in operation for hydrogen production. (Reporting and writing by Timothy Gardner, Laila K. Kearney, and Nichola. Groom. Valdmanis. Editing by Leslie Adler.)

(source: Reuters)