Hydrogen Utilization and Sustainability Act

To amend the Internal Revenue Code of 1986 to expand the renewable electricity production credit to include electricity produced from hydrogen. 1. Short title This Act may be cited as the Hydrogen Utilization and Sustainability Act 2. Expansion of renewable electricity production credit to include electricity produced from hydrogen (a) In general Section 45 (1) in subsection (c)— (A) in paragraph (1)— (i) in subparagraph (H), by striking and (ii) in subparagraph (I), by striking the period at the end and inserting , and (iii) by adding at the end the following new subparagraph: (J) qualified hydrogen. ; and (B) by adding at the end the following new paragraph: (11) Qualified hydrogen The term qualified hydrogen 2 ; and (2) in subsection (d), by adding at the end the following new paragraph: (12) Hydrogen facility (A) In general In the case of a facility using qualified hydrogen to produce electricity, the term qualified facility (i) for which not less than 70 percent of the electricity produced at such facility during any taxable year is attributable to the use of qualified hydrogen, and (ii) (I) the construction of which begins before January 1, 2024, or (II) which— (aa) was originally placed in service before the date of enactment of this paragraph and, prior to the modification described in item (bb), did not use hydrogen to produce electricity, and (bb) before January 1, 2024, is modified to use qualified hydrogen to produce electricity. (B) Modification For purposes of subparagraph (A)(ii)(II)(bb), a facility shall be treated as modified before January 1, 2024, if the construction of such modification begins before such date. (C) Election If the owner of the facility described in subparagraph (A) makes an election under this subparagraph in such time and manner as the Secretary may prescribe by regulations, the credit under this section— (i) shall be allowable to the person that leases and operates such facility, and (ii) shall not be allowable to the owner of such facility. (D) Special rules (i) Exclusion of electricity not produced from qualified hydrogen For purposes of subsection (a)(2), the total amount of kilowatt hours of electricity produced by the taxpayer at a qualified facility described in subparagraph (A) for any taxable year shall be equal to the product of— (I) the total amount of kilowatt hours of electricity produced by the taxpayer at such facility for such taxable year, multiplied by (II) an amount equal to the quotient of— (aa) the amount of qualified hydrogen used at such facility to produce such electricity (as determined on the basis of Btu content), divided by (bb) the total amount of fuel used at such facility to produce such electricity (as determined on the basis of Btu content). (ii) Adjustment for negative carbon intensity (I) In general For purposes of subsection (a)(2), the total amount of kilowatt hours of electricity produced by the taxpayer at a qualified facility described in subparagraph (A) for any taxable year (as determined after application of clause (i)) shall be increased by an amount equal to the applicable percentage of such total amount. (II) Applicable percentage For purposes of subclause (I), the applicable percentage for a qualified facility for any taxable year is the amount (expressed as a percentage) equal to the product of— (aa) 1 percentage point, multiplied by (bb) an amount equal to the quotient of— (AA) the total amount of carbon dioxide (expressed in metric tons) which is removed from the atmosphere during such taxable year through the use of qualified hydrogen (as determined pursuant to a certification of negative carbon intensity for such hydrogen under subsection (c)(11)) at such qualified facility, divided by (BB) 1,000. . (b) Effective date The amendments made by this section shall take effect on the date of enactment of this Act.

Summary: Hydrogen Utilization and Sustainability Act This bill expands the tax credit for producing electricity from renewable resources to include qualified hydrogen. The bill defines qualified hydrogen as hydrogen fuel certified as having a carbon intensity of not greater than 75 grams of CO2e (carbon dioxide equivalent) per kilowatt hour of electricity produced, as determined based on a lifecycle analysis.