Zero-Carbon Hydrogen Tax Rules Spark Divide Over Grid Emissions

Proposed rules governing a new production tax credit for clean hydrogen have raised fresh skepticism from industry about whether the Biden administration can meet its decarbonization goals.

The Treasury Department’s much-anticipated proposal in December would require hydrogen producers to prove they’re sourcing electricity from new sources of power and, by 2028, to match their production to clean power generation on an hourly basis. Producers would also need to show they are sourcing power from a plant in the same region of the country.

The guidance effectively excludes nuclear and hydropower—energy sources that are difficult or expensive to ...