The US Treasury’s final hydrogen 45V guidance establishes the rules for qualifying electrolytic hydrogen projects, establishing an accounting framework for projects to follow. The rules maintain the “three pillars” overall structure — requiring producers to build and deliver clean power, at the time of production, to hydrogen projects to qualify for the tax credit.

This memo explores the essential elements of bringing projects to market under the new guidance: understanding the foundational requirements, exploring contract structures from basic power purchase agreements to complex Energy Attribute Credits (EAC) strategies, and leveraging existing systems while preparing for more sophisticated tracking mechanisms. The rules of the game are now set — it’s time to focus on winning strategies.

For project developers, understanding the rules is crucial to optimize projects and contract with qualifying clean electricity production. In order to secure financing and start building, they will need to be prepared for a shift to hourly matching in 2030 and meet the delivery requirements of their customers.

The simplest path starts with contracts. Something that’s already available now in the form of direct agreements with clean power facilities. These contracts can build off decades of commercial experience with clean power procurement and registries, while providing the additional hourly data.

The guidance also allows for increasingly sophisticated approaches as markets mature. This framework creates a market-driven system where regions with the strongest clean energy deployment will offer the most competitive opportunities for hydrogen production.

The Important Details

The 400+ page final rule covers a lot of ground, but certain details are more important to project development than others for project design. The rule adds key flexibility to the overall system, while maintaining the general structure of time-matching, regionality, and incrementality.

The final rule sets up a market-based system, enabling the creation of certificates that can be produced and traded, while establishing guardrails to avoid double-counting and ensure real emissions reductions. It also creates an important safe harbor — all projects that start construction can lock in these rules (and the current GREET version) for the lifetime of the project.

Incrementality

Key provisions:

• All projects built up to 3 years before the hydrogen facility was placed in service can provide qualifying EACs to that facility.
• Existing nuclear power can qualify under certain conditions that indicate retirement risk, including average annual gross revenue of less than 4.375¢/kWh in any 2 years from 2017-2021.
• It must also be merchant nuclear (50%+ wholesale market sales) or a single-unit plant with a 200 MW cap per reactor.
• Nuclear restarts and uprates also qualify.
• Projects are exempt from the incrementality standard if a state has decarbonization standards and an emissions cap program which act as emissions guardrails — currently both California and Washington qualify.
• There are currently no avenues to prove “curtailment” due to administrative complexity.

The final rule takes a broader approach to incrementality than initially proposed. By including at-risk nuclear plants and state exemptions, the rule provides clearer guidance while maintaining incrementality as a requirement.

Temporality

Key provisions:

• Extends annual matching to 2030, after which all projects are required to hourly match.
• The final guidance includes additional flexibility by calculating the credit separately for both each hour and each electrolyzer — however, the overall facility must meet a 4kg CO₂/kg H2 cap.
• Each electrolyzer — or a system that uses electricity to split water into hydrogen and oxygen — (not balance of plant) is considered a facility, allowing projects to allocate certificates strategically — in practice projects will only lose the credit for the volume of electricity that is not covered by.
• The guidance allows for the use of non-incremental grid storage if a registry emerges that can track and trace these EACs.
• Carbon capture and sequestration added to a power plant can provide EACs to a project, which will be valued at the new average annual emissions rate of that facility.

The new temporal requirements are far more practical (the proposed rule stated that if a project missed enough hours, they could lose the credit for an entire year). The final rule’s shift of hourly matching to 2030 provides a longer runway for market development, but the most important change involves the way the Treasury handles periods where a project needs to rely on the grid.

The hydrogen final guidance is different from the proposed rule, in that it provides two forms of flexibility:

1. It allows a company to calculate emissions from each hour separately
2. It allows a project to calculate emissions from each electrolyzer separately
   • The guidance indicates that developers can register each interdependent electrolyzer as a “facility”

This means that if there aren’t enough EACs available to fully cover electrolyzer load in a given hour, the project can still get $3/kg for whatever EACs they are able to procure — the credit is not “all or nothing”.

It should be far easier to sign firm hydrogen offtake contracts and take more risks, because projects can pull grid power in a pinch.

Deliverability

Key provisions:

• Clear boundaries that can be grandfathered for projects
• Cross-regional clean electricity allowed with proper transmission rights
• Hourly NERC E-tag tracking required
• Additional attestation needed for Canadian/Mexican imports
• Safe harbor provisions for deliverability zones
• No transmission losses included for EACs

The final guidance creates a predictable system for determining if a clean power facility is “deliverable”, with well-defined boundaries and a safe harbor. If a power facility qualifies as deliverable for one year, it can qualify over the credit period to provide certainty. The cross-regional and cross-border system opens the door to more variety.

Contracts and registry requirements:

• The final guidance requires the use of a registry to avoid double counting.
• There are no requirements on the type of contracts (e.g., physical bundling of power and EACs) as in Europe — this allows for a broader set of contracts and markets to emerge.
• States also have the ultimate say when determining how 45V overlaps with their clean electricity standard policies.

While not typically considered part of the “Three Pillars,” rules around contracting are a key decision point. In the EU, contracts require physical ownership of the associate power as well, which constrains the types of arrangements that can be considered. The US final rule was instead silent on those requirements, de facto allowing far more flexibility to trade and contract for these certificates.

The Requirements Add Up to a Market

These requirements create a market mechanism where supply and demand dynamics will play out across each region. The system’s success depends on the buildout of clean power in each region and, after 2030, the hourly load shape. The market ensures that hydrogen electricity demand cannot outpace clean power deployment in any region, which means regions with the highest clean capacity buildout will likely offer the most competitive EAC prices. However, hydrogen producers won’t operate in isolation — they’ll face competition from data centers and other granular power purchasers, both for EACs and for fundamental infrastructure access like interconnection rights.

To begin development, teams must determine their compliance pathway to calculate potential revenue. This creates a critical sequencing challenge: developers need to demonstrate how they’ll qualify for tax credits before they can finalize project economics.

• First-mover projects will still need to be prepared from the start to switch from annual to hourly matching.
• Bilateral contracts for EACs could help demonstrate rights to the necessary capacity up to 80% matching (to hit the 4kg CO2/kg H2 facility cap), while projects fill in the rest over time.
• Developers must demonstrate power contracts upfront to establish project viability.

For procurement, there is a two-step process:

1. Identify qualifying renewable energy projects that achieve the incrementality (built after the right date) and deliverability (built in the right region) requirements and/or
2. Sign contracts for some (or all of) the required EACs and power to produce the desired volumes of hydrogen that receive the tax credit.

Any project developer that wants to move forward needs to demonstrate to financiers that they have sufficient contracts for qualifying clean power in order to calculate revenue, offtake contracts — or a contract that allows a buyer (the “off-taker”) to purchase all or a substantial portion of a producer’s future output allowing the off-taker to purchase output at a specific price no matter the future price or demand changes — and project sizing.

Following conversations with developers, registries, and financial institutions, we have done a deep dive into how developers can engage with and sign contracts for hydrogen projects.

Contract Fundamentals and Market Maturity While registries with full hourly capabilities are still developing, bilateral contracts can provide legal rights to EACs today. The market is more mature than many realize — over 20 projects across 5 continents are already conducting hourly matching for more than 5 terawatt-hours. First-mover hydrogen projects can rely on two key elements:

• Bilateral hourly contracts for EAC ownership of specific power capacity
• Monthly EACs combined with hourly production and consumption data for verification

Building on Established Frameworks Hydrogen producers can leverage existing contract structures, as EAC ownership contracts represent a natural evolution of traditional PPAs and vPPAs, with the addition of hourly production data sharing. Organizations like Level10 have developed “hourly ready” contract language through their GC Trading Alliance, while corporate procurers have established effective practices for streamlining negotiations and ensuring accurate, flexible data flows.

Pioneering electricity procurers, like Google and Microsoft, have pioneered contract language and are working through some of the bugs. Moving forward, it should be possible to make all PPAs “hourly ready”, and therefore able to trade and sell valuable EACs as the market for 24/7 clean power grows.

Leveraging Existing Registry Infrastructure While hourly registry solutions continue to mature, current systems can support first movers’ energy accounting and regulatory compliance through:

1. Existing registries for proper EAC retirement and double-counting prevention
2. Meter data for hourly matching verification
3. Bilateral contracts like PPAs for structured arrangements

Companies like Singularity and FlexiDao have developed products that can integrate with GREET for 45V qualification. Some registries, like PJM and M-RETS, are already offering limited hourly functionality, with full capability expected within 1-2 years.

Data Needs

Advanced Contract Considerations

Projects must procure a minimum number of qualifying clean capacity MWs to fulfill offtake agreements. High electrolyzer utilization (70%+ capacity factor) can be achieved through a portfolio of wind and solar generation contracts, with modern forecasting services providing confidence in hourly matching capability.

The US framework differs significantly from the EU system by not requiring power contracting for EAC qualification. This enables more flexible unbundled EAC contracting structures.

There are two more advanced contract structures that could be useful tools to help developers fill in any gaps.

Partial Contracts

At times, a hydrogen project will only need part of, rather than the entirety of a clean energy project to achieve the desired coverage. These are useful when topping up a procurement strategy or managing very small projects. The same general principles apply, but the owner will need to set up a contract and data sharing arrangement.

Annual-Hourly Swaps

Hourly and annual EACs do not have the same dynamics — notably hourly EACs have more volatility as supply and demand mismatches each hour of the day based on clean power production. This mismatch creates potential value, allowing the hourly procurer to be “first in line” for the most valuable EACs while the annual producer receives the remainder for the EACs.

This could allow existing PPA owners to sell off valuable EACs for hydrogen projects, allowing these projects to accelerate access to clean power without waiting for new projects to wind through the interconnection queues.

Well-structured incentives and markets can be efficient and creative — and as projects develop, more arrangements may fall into place to solve practical problems.

While contracts can fill most of the needs of hydrogen producers, the most efficient system will include some level of trading, and the final rule enables these transactions. Trading can be helpful on the margins, but several components need to come together to provide value, and likely are not helpful for raising finance for first movers.

To effectively capture this value, hydrogen facilities must implement hourly tracking registries, develop protocols for managing uncertainty, and establish reliable systems for monitoring and tracking storage.

Registry Requirements

A full registry with hourly tracking capabilities becomes essential in certain scenarios, particularly to prevent double counting in trading and market transactions. These registries serve as a balance sheet, ensuring each hourly certificate has only one consumer. For spot markets to function efficiently, all participants must operate within a single registry system, as this centralized approach enables greater market liquidity. However, for simpler transactions like swaps between two projects trading excess EACs, only the involved parties need to share a common registry.

The registry system offers flexibility in implementation. Most bilateral contracts can include third party access and data sharing clauses, making it straightforward to later port this information into a market system for buying and selling excess certificates.

Managing Uncertainty in EAC Trading

To trade hourly EACs, first you need to know in real time if you have extra to sell or are short on clean power. In electricity markets, most trading occurs on a day-ahead or hour-ahead basis, and there is uncertainty reflecting the inherent variability in renewable production (approximately ±10% day-ahead, or ±5% hour-ahead). Given this uncertainty, sellers may consider several strategies:

• Selling capacity (such as 1 MW of wind) with projected MWh values rather than transacting specific MWh amounts
• Maintaining a 5-10% reserve of EACs per hour as a buffer against shortfalls
• Using retrospective purchases (e.g., buy EACs after the hydrogen is produced) if the price is right.

In contrast to the proposed rule, the penalty for “missing” a given hour is fairly low, so in the future it’s possible that developers can be aggressive with production and look to EAC markets to fill in the gaps. This creates avenues for developers to capture more value from their project.

The Role of Storage

While the final rules permit energy storage, the final rules require complex accounting requirements but waive incrementality.

The precise role is unclear — building dedicated storage solely for hydrogen time-shifting typically is suboptimal — it’s an order of magnitude cheaper to store energy as hydrogen rather than as electricity.

At first, storage integrated directly behind the meter of the qualifying renewable facility or the hydrogen facility likely is the easiest to manage and account for by looking at the meter to understand the net impact, and it could be worth presenting those facilities as a unit.

One potential upside is that existing storage facilities, already financed through other revenue streams, could provide valuable load-shifting services for electrolysis needs. Current market conditions, particularly in Texas where storage services command $100+ per MWh spreads, may make this application cost prohibitive. However, as storage penetration increases, costs decline and ancillary revenue dries up, storage could play an increasingly important role in daily energy shifting, increasing utilization rates of hydrogen projects.

The final 45V guidance establishes a pragmatic framework for green hydrogen development that effectively balances environmental integrity with commercial viability. Through its requirements for clean electricity sourcing — including incrementality, temporality, and deliverability — the guidance creates a robust foundation while adding essential flexibility mechanisms to make it far more practical.

Project development can move forward today using bilateral contracts and existing registry systems, with time to prepare for more sophisticated hourly tracking infrastructure by 2030. For project developers and financiers, success hinges on securing appropriate clean power contracts upfront that demonstrate compliance through 2030 and beyond, while maintaining adaptability as markets mature.

The framework established by 45V represents more than just guidance for green hydrogen — it serves as a blueprint for the broader energy transition. The systems developed for hourly matching, power plant development, and electricity delivery demonstrate how to reliably align new load growth with new supply. Whether through identifying prime energy resource locations, diversifying energy resources, or operational flexibility, the strategies emerging from this framework are the nuts and bolts of building a clean economy.

The lessons learned from implementing these systems will not only guide the broader economy’s transition but also ensure the hydrogen industry develops the infrastructure needed for long-term competitiveness and economic viability. This approach creates a foundation for liftoff in the hydrogen industry — one built to last.