45V: construction timelines set for renewable projects

Begin by start of 2028 to qualify for up to $3 production tax credits

Following the passage of new legislation in the USA, the timeline has been set for hydrogen and ammonia producers to benefit from 45V tax credits. While the original Inflation Reduction Act passed in 2023 granted hydrogen developers over a decade to break ground and claim up to $3/kg in funding support, the new bill requires construction on renewable hydrogen projects to begin by January 1, 2028. An earlier version of the legislation brought the timeline forward all the way to January 1, 2026, effectively removing access to 45V for electrolytic hydrogen projects planned in the USA.

While shortening the launch path for the nascent US hydrogen industry is far from ideal, this short window of opportunity provides an opportunity for well-organised developers of a number of renewable ammonia projects in the USA – including the regional Hydrogen Hubs.

Extending the commencement of construction date to January 2028 for the hydrogen production credit gives the industry an opportunity to advance a significant round of projects that will jump start the U.S. hydrogen market, including the crucial Regional Hydrogen Hubs.

The extension reflects the efforts of Fuel Cell and Hydrogen Energy Association (FCHEA) and the coordination of organizations from multiple energy sectors who came together to support a reasonable, commonsense policy solution. The U.S. hydrogen sector is now positioned to leverage this opportunity and advance American energy and manufacturing leadership.

Frank Wolak, President & CEO of the Fuel Cell and Hydrogen Energy Association (FCHEA), in his organisation’s official press release, 3 July 2025

This extension is estimated to provide a 7 to 1 return on the federal investment and create a modern, high-wage energy workforce built on American innovation and ingenuity. Extending 45V is not only a sound investment but also a strategic commitment to securing America’s long-term energy leadership.

Official statement from the The Clean Hydrogen Future Coalition (CHFC), 1 July 2025

Click to expand. Planned and installed electrolyser capacity in the USA, mapped by the DoE. From Maeve Allsup, “The hydrogen sector playbook for saving 45V” (Latitude Media, 26 June 2025).

Federal government incentives – including tax credits, grants, and loans – have helped a diverse clean energy landscape emerge in the USA, with a particular focus on southern and western states, as well as rural areas. Historic manufacturing and industrial corridors are materially benefiting from these incentives, as well as emerging clusters such as the Hydrogen Hubs. So, while the window of opportunity for electrolytic hydrogen has been welcomed by industry associations and key stakeholders, many caution that further rolling back clean energy incentives will undermine innovation and energy leadership by the USA, ceding ground to other global players.

The legislation has also made changes to 45Q – the tax credit for CCS that underpins a wide range of low-emission ammonia projects in the USA. 45Q now includes credit parity ($85 per ton, up from $60 per ton) for the utilization of CO2, the same as for permanent sequestration.