Code of Federal Regulations · Section

§ 1.45V-5 — v-5 Procedures For Verification Of Qualified Clean Hydrogen Production And Sale Or Use

26 C.F.R. § 1.45V-5

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(a) In general. A verification report must be attached to a taxpayer's Form 7210, Clean Hydrogen Production Credit, or any successor form(s), with the taxpayer's Federal income tax return or information return for each qualified clean hydrogen production facility and for each taxable year in which the taxpayer claims the section 45V credit.

(b) Requirements for verification reports. A verification report specified in paragraph (a) of this section must be prepared by a qualified verifier under penalties of perjury and must contain—

(1) An attestation from the qualified verifier regarding the taxpayer's production of qualified clean hydrogen for sale or use, including an attestation that the inputs used to determine the lifecycle GHG emissions rate of the hydrogen production process are accurate (production attestation);

(2) An attestation from the qualified verifier regarding the amount of qualified clean hydrogen sold or used (sale or use attestation);

(3) An attestation from the qualified verifier regarding conflicts of interest (conflict attestation);

(4) Information regarding the qualified verifier, including documentation of the qualified verifier's qualifications (qualified verifier statement);

(5) Certain general information about the taxpayer's hydrogen production facility where the hydrogen production undergoing verification occurred;

(6) Any documentation necessary to substantiate the verification process given the standards and best practices prescribed by the qualified verifier's accrediting body and the circumstances of the taxpayer and the taxpayer's hydrogen production facility; and

(7) Any other information required by IRS forms or instructions.

(c) Requirements for the production attestation. The following requirements apply to the production attestation:

(1) The production attestation must be an attestation, made under penalties of perjury, that the qualified verifier performed a verification sufficient to determine that the operation, during the applicable taxable year, of the hydrogen production facility that produced the hydrogen for which the section 45V credit is claimed, any lifecycle GHG emissions data inputs, and any energy attribute certificates (EACs) applied pursuant to § 1.45V-4(d) for the purpose of accounting for such facility's emissions, are accurately reflected with reasonable assurance in—

(i) The amount of qualified clean hydrogen produced by the taxpayer that is claimed on the Form 7210, Clean Hydrogen Production Credit, or any successor form(s), to which the verification report is attached; and

(ii) Either—

(A) The data the taxpayer entered into the 45VH2-GREET Model to determine the lifecycle GHG emissions rate that is claimed on the Form 7210, Clean Hydrogen Production Credit, or any successor form(s), to which the verification report is attached; or

(B) The data the taxpayer submitted in the PER petition relating to the hydrogen for which the section 45V credit is claimed, and the data provided to the DOE in support of the taxpayer's request for the emissions value provided in the PER petition.

(2) If the production attestation attests that qualifying EACs were acquired and retired pursuant to § 1.45V-4(d), then the production attestation must confirm that the electricity generator or generators associated with such EACs were not registered on multiple qualifying EAC registries, or, in the event such generators are registered on multiple qualifying EAC registries, that each EAC undergoing verification from each such generator registered on multiple qualifying EAC registries is being issued by only one qualifying EAC registry.

(3) If the production attestation attests to the information specified in paragraph (c)(1)(ii)(B) of this section, then the production attestation must also specify the emissions value received from the DOE that was calculated using such data, expressed in kilograms of carbon dioxide equivalent (CO2e) per kilogram of hydrogen.

(4) The production attestation must specify the lifecycle GHG emissions rate(s) (expressed in kilograms of CO2e per kilogram of hydrogen) and the amount of qualified clean hydrogen produced by the taxpayer (expressed in kilograms), that are claimed on the Form 7210, Clean Hydrogen Production Credit, or any successor form(s), to which the verification report is attached.

(d) Requirements for the sale or use attestation—(1) In general. The sale or use attestation must be an attestation, made under penalties of perjury, that the qualified verifier performed a verification sufficient to determine that the amount of qualified clean hydrogen that is specified in the production attestation pursuant to paragraph (c)(1)(i) of this section, and that is claimed on the Form 7210, Clean Hydrogen Production Credit, or any successor form(s), to which the verification report is attached, has been sold, or has been used by a person who makes a verifiable use of such hydrogen.

(2) Verifiable use. For purposes of section 45V(c)(2)(B)(ii) of the Code and the section 45V regulations (as defined in § 1.45V-1(a)(17)), a person's verifiable use of the hydrogen specified in paragraph (d)(1) of this section can occur within or outside the United States. A verifiable use can be made by the taxpayer or a person other than the taxpayer. For example, a verifiable use includes a tolling arrangement pursuant to which a service recipient provides raw materials or inputs, such as water or electricity, to a toller (that is, a third-party service provider that owns a hydrogen production facility), and the toller produces hydrogen for the service recipient using the service recipient's raw materials or inputs in exchange for a fee. In such a case, use of the hydrogen by the service recipient would be a verifiable use. However, a verifiable use does not include—

(i) Use of hydrogen to generate heat or power that is then directly used in the production of more hydrogen (except when such heat or power is derived from a byproduct of hydrogen use); or

(ii) Venting or flaring of hydrogen.

(3) The following example illustrates the application of paragraph (d)(2) of this section.

(i) Example—(A) Facts. In 2025, Taxpayer A produces 100 kilograms of hydrogen through a process that results in an emissions rate of not greater than four kilograms of CO2e per kilogram of hydrogen produced. However, throughout the year, Taxpayer A feeds two kilograms of the hydrogen back into its facility's process train to replace what would otherwise be externally sourced energy inputs directly supplying the hydrogen production process. Taxpayer A also flares two kilograms of the hydrogen for testing and maintenance purposes. Taxpayer A puts 96 kilograms of the hydrogen to use in a separate facility that produces fertilizer. Additionally, Taxpayer A recovers waste heat from the fertilizer production process to generate electricity used to power both facilities.

(B) Analysis. Taxpayer A has made a verifiable use of 96 kilograms of qualified clean hydrogen and may claim the section 45V credit for that amount, assuming all other requirements for claiming the section 45V credit are met. The two kilograms of hydrogen that are flared have not been verifiably used, and therefore Taxpayer A may not determine the section 45V credit with respect to such two kilograms of hydrogen. The two kilograms of hydrogen that are directly supplied back into the hydrogen process have also not been verifiably used because the hydrogen is being consumed to produce heat or power that will then directly be used to produce more hydrogen. Consumption of hydrogen in this manner (to generate heat or power that is then directly used to produce hydrogen) is not a verifiable use under paragraph (d)(2) of this section.

(e) Requirements for the conflict attestation. The conflict attestation must include attestations, made under penalties of perjury, that—

(1) The qualified verifier has not received a fee based to any extent on the value of any section 45V credit that has been or is expected to be claimed by any taxpayer and no arrangement has been made for such fee to be paid at some time in the future;

(2) The qualified verifier has not been a party to any transaction in which the taxpayer sold qualified clean hydrogen it had produced or in which the taxpayer purchased inputs for the production of such hydrogen;

(3) The qualified verifier is not related, within the meaning of section 267(b) or 707(b)(1) of the Code, to, or an employee of, the taxpayer;

(4) The qualified verifier is not married to an individual described in paragraph (e)(3) of this section; and

(5) If the qualified verifier is acting in his or her capacity as a partner in a partnership, an employee of any person, whether an individual, corporation, or partnership, or an independent contractor engaged by a person other than the taxpayer, the attestations under paragraphs (e)(1) through (4) of this section must also be made with respect to the partnership or the person who employs or engages the qualified verifier.

(f) Requirements for the qualified verifier statement. The qualified verifier statement must include the following—

(1) The qualified verifier's name, address, and taxpayer identification number;

(2) The qualified verifier's qualifications to conduct the verification, including a description of the qualified verifier's education and experience and a photocopy of the qualified verifier's certificate received from their accrediting body;

(3) If the qualified verifier is acting in his or her capacity as a partner in a partnership, an employee of any person, whether an individual, corporation, or partnership, or an independent contractor engaged by a person other than the taxpayer, the name, address, and taxpayer identification number of the partnership or the person who employs or engages the qualified verifier;

(4) The signature of the qualified verifier and the date signed by the qualified verifier; and

(5) A statement that the verification was conducted for Federal income tax purposes.

(g) General information on the taxpayer's hydrogen production facility. The verification report must include the following information for the taxpayer's hydrogen production facility where the hydrogen production undergoing verification occurred:

(1) The location of the hydrogen production facility;

(2) A description of the hydrogen production facility, including its method of producing hydrogen;

(3) The type(s) of feedstock(s) used by the hydrogen production facility during the taxable year of production;

(4) The amount(s) of feedstock(s) used by the hydrogen production facility during the taxable year of production; and

(5) A list of the metering devices used to record any data used by the qualified verifier to support the production attestation under paragraph (c) of this section along with a statement that the qualified verifier is reasonably assured that the device(s) underwent industry-appropriate quality assurance and quality control, and the accuracy and calibration of the device has been tested in the last year.

(h) Qualified verifier. The term qualified verifier means any individual or organization with active accreditation—

(1) From the American National Standards Institute National Accreditation Board to conduct validation and verification in accordance with the requirements of ISO 14065:2020 and ISO 14064-3:2019; or

(2) As a verifier, lead verifier, or verification body under the California Air Resources Board Low Carbon Fuel Standard program.

(i) Unrelated party. For purposes of section 45V(c)(2)(B)(ii), the term unrelated party means a qualified verifier who meets the requirements of paragraph (e) of this section.

(j) Requirements for taxpayers claiming both the section 45V credit and the section 45 credit or the section 45U credit. In the case of a taxpayer who produces electricity for which either the section 45 or section 45U credit is claimed and the taxpayer or a related person uses such electricity to produce hydrogen for which the section 45V credit is claimed, the verification report must also contain attestations that the qualified verifier performed a verification sufficient to determine that—

(1) The electricity used to produce such hydrogen was produced at the relevant facility for which a section 45 or section 45U credit is claimed;

(2) The given amount of electricity (in kilowatt hours) used to produce such hydrogen at the relevant hydrogen production facility is reasonably assured of being accurate; and

(3) The electricity for which a section 45 or section 45U credit was claimed is represented by EACs that are acquired and retired in connection with the production of such hydrogen.

(k) Timely verification report. A verification report must be signed and dated by the qualified verifier no later than—

(1) The due date, including extensions, of the Federal income tax return or information return for the taxable year during which the hydrogen undergoing verification is produced; or

(2) In the case of a credit first claimed for the taxable year on an amended return or administrative adjustment request, the date on which the amended return or administrative adjustment request is filed.

(l) Applicability date. This section applies to taxable years beginning after December 26, 2023.

26 C.F.R. § 1.45V-4 26 C.F.R. § 1.45V-6

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