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In North America, Fortescue is spearheading the affordable development of green hydrogen, investing in cutting-edge technologies, leaning into manufacturing and energy generation opportunities, and collaborating on research and development with leading research institutions such as the National Renewable Energy Laboratory (NREL).

Fortescue is:

  • Investing across the value chain to supply low-cost green hydrogen derivative fuels from 100% renewable sources.
  • Supporting advanced electrolyzer development, next-generation technology, and manufacturing initiatives.
  • Fostering research and innovation in electrolysis technology.
  • Collaborating with the Department of Energy (DOE), leading U.S. universities, and university-affiliated green-tech companies on advanced photovoltaic material development and advanced electrolyzer development.
  • Connecting research students to green hydrogen innovation challenges.

Fortescue is helping to drive the green revolution, shaping the future of sustainable technology and energy solutions with multiple projects across the United States.

Issues: 45V

Harnessing hydrogen production will be essential to America’s energy transition. Overly restrictive and untenable guidelines for a critical hydrogen tax credit – 45V – threaten the future of the hydrogen industry in the United States, its economic benefits, and U.S. climate goals. 


The Section 45V credit is a legislative measure passed by Congress as part of the Inflation Reduction Act (IRA) of 2022 to foster domestic hydrogen production through a ten-year production tax credit (PTC). 

Congress directed the Treasury Department to issue guidance to define “clean hydrogen” for the purposes of claiming the credit. To qualify, the production process or pathway for hydrogen must not exceed 4 kilograms of carbon dioxide equivalent per kilogram of hydrogen. The incentive varies depending on the emissions rate, with the lowest emitting hydrogen qualifying for the maximum credit. 

Current Debate

The Treasury Department issued its draft guidance in December of 2023. Since their introduction, these guidelines have been called ‘completely unworkable in practice’ ( Utility Workers Union of America), ‘overly restrictive’ ( H2Hubs Joint Letter) and “does not fully reflect [Congressional] intent” ( Sen. Tom Carper). 

Key concerns include that the regulations will make it more expensive and more difficult to produce clean hydrogen in the U.S. These regulations introduce new limitations on credit availability, centered around the "three pillars" requirements: incrementality, temporal matching, and deliverability, which place additional burdens on hydrogen producers. 

  • Incrementality: eligible clean hydrogen can only use new sources of renewable power
  • Temporal Matching: eligible clean hydrogen must match clean power from the grid with the time the hydrogen is produced.
    • Until December 31, 2027, time matching with clean power can be annual in nature, rather than hourly.
    • Starting January 1, 2028, and beyond: time matching must be tracked hourly to qualify.
  • Deliverability: eligible clean hydrogen must source power from within the designated region where it is produced.

These proposed conditions have raised concerns regarding their alignment with the original statute's intent and the practical challenges they present for hydrogen production.

Clean Hydrogen at Risk

The proposed regulations threaten hydrogen producers using electricity from existing clean energy sources that may not meet the new criteria. In short: the draft rule is unworkable. 

The additionality requirement, which favors electricity from newer power facilities, may disqualify hydrogen production relying on established low-emitting sources and fails to account for permitting delays, as well as the up to five-year project pipeline for new clean power projects to come online to the grid. The Department of Energy has noted the backlog, reporting that at the end of 2022 there were more than 2,000 GW of renewable energy and storage capacity sitting in transmission interconnection queues. And in 2023, the American Clean Power Association reported that on average, clean power projects are delayed by 14 months due to strained transmission capacity.  

Moreover, the technology to meet the requirements of one of the key pillars—requiring the purchase of power to be timed with production— is not widely available, and most power systems today are not yet equipped to accommodate such technology. These time matching requirements can also be incredibly costly; one analysis by Wood Mackenzie found that if 45V guidelines were implemented with hourly matching requirements, the resulting hydrogen could be 60 to 175 percent more expensive (vs. annually matched production). 

The U.S. hydrogen industry needs a workable tax credit that advances the clean energy and emissions reduction goals that was championed by the IRA. These tax credits hold the key to driving innovation, decarbonization, and the growth of clean hydrogen.

To learn more about Fortescue's position on 45V, read North American President and CEO Andy Vesey's March testimony before the IRS, as well as his recent op-ed in Utility Dive.

Fortescue Investment

As an industry leader in green hydrogen, Fortescue is committed to growing hydrogen’s role in America’s clean energy future, and our mission is to supply low-cost green hydrogen in order to lower emissions in hard-to-decarbonize sectors. 

In the U.S. alone, Fortescue is investing billions of dollars in projects in Arizona, Washington, and Colorado. Our investments across America will bring high paying jobs that support achieving the goals of a just transition while spurring innovation for a clean energy future. We are deeply committed to producing zero-emission green hydrogen from 100 percent renewable sources and have partnered with the DOE and leading U.S. universities to research the ways in which green hydrogen production and uses can be leveraged in a clean economy. 

Industry Voices

“The new, more stringent, requirements being demanded of hydrogen were not envisioned when the IRA was written and passed. If the goal is to scale clean hydrogen, we should be exploring ways to encourage its production, not creating new hurdles before it can even get off the ground.

- Katrina Fritz, Executive Director, California Hydrogen Business Council | Let’s get hydrogen right from the start: We need a tax credit that is practical and workable

“To stunt the expansion of this promising industry through the inclusion of additionality clauses or hourly matching requirements will be to directly stifle the creation of good union jobs, hamstring the greening of our grid, and ignore the clear Congressional intent demonstrated through the IRA and IIJA.”

- North America’s Building Trades Unions (NABTU) | Letter

“The Biden administration’s momentum on bolstering the United States’ significance in the global green economy must start with an inclusive approach to hydrogen tax credits… Undoubtedly, requirements that encourage companies to verify hydrogen production and delivery of supply from net-zero emissions sources are necessary in the long term for achieving climate goals. Yet, overly ambitious definitions for what constitutes ‘clean hydrogen’ could stifle the industry’s growth and negatively impact the strategic interests of the United States.”

- Landon Derentz and Richard Morningstar, Atlantic Council Global Energy Center | The United States’ edge in the clean energy economy starts with outcompeting China on hydrogen   

"To accelerate technological breakthroughs that will bring down costs and increase access to clean hydrogen, we need current projects like the Hubs to move forward at full capacity. We strongly urge the U.S. Treasury Department to reconsider and revise its proposed guidance on the hydrogen production tax credit. It is essential to strike a balance that encourages the growth of the clean hydrogen industry, protects jobs, preserves environmental gains, and foster opportunities for disadvantaged communities."

- Hydrogen Hubs Letter to Department of Treasury