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Gov. Pritzker Takes Action to Bolster Illinois' Hydrogen Economy

Press Release - Tuesday, July 25, 2023

Legislation creates a tax credit of $10 million per year for users of clean hydrogen in Illinois

CHICAGO — Further delivering on his commitment to make Illinois a national leader on climate action, Governor JB Pritzker signed House Bill 2204, establishing a tax credit for users of clean hydrogen in the state of Illinois.

"Here in the Land of Lincoln, we refuse to deny the looming threats of the climate crisis—and we are taking tangible action to create a more sustainable, environmentally-conscious future for the next generation of Illinoisans," said Governor JB Pritzker. "This tax credit for users of clean hydrogen won't just bolster our clean energy economy—it further sets us on a path towards reaching our ambitious goal of 100% clean energy by 2050."

"We don't have a moment to spare in the fight against global warming," State Representative Terra Costa Howard (D-Glen Ellyn) said. "We desperately need pragmatic new alternatives to carbon fuels, and this tax credit will help to make Illinois a leader in establishing a clean energy economy that includes important new investments in hydrogen technologies."

"Here in Illinois, we are taking the lead on a nationwide effort to decarbonize," said State Senator Dave Koehler (D-Peoria). "Providing a hydrogen use tax credit will help Illinois become an attractive option for hydrogen hubs that will support our agricultural, refinery and transportation industries and create jobs for workers across the state."

"This measure helps to better position Illinois to support developing technologies, attract investment and create jobs," Assistant Majority Leader Jay Hoffman (D-Swansea) said. "We should always be looking for opportunities to make this state a national leader within an industry, and this tax credit can help us become this region's hydrogen hub."

This legislation creates a tax credit of $10 million per year in 2026 and 2027 for users of clean hydrogen. At the conclusion of the tax credit, the Illinois Environmental Protection Agency will run a comprehensive study to evaluate both the emissions impact of the tax credit and the national landscape to recommend additional policy measures to ensure Illinois remains competitive in the clean hydrogen economy and meets the clean energy goals outlined in the Climate and Equitable Jobs Act.

The tax credit was designed to keep pace with the state's clean energy goals and includes a number of measures to ensure environmental benefit. In addition to the comprehensive study, those measures include:
  • Directing funds to eligible uses that have been agreed to by environmental groups and industry to ensure hydrogen investments are made where they can have the greatest impact while also maintaining the state's electrification goals.
  • Ensuring that hydrogen projects have community input via public hearings and requiring 40% of the benefit go to equity investment eligible communities as outlined in CEJA.
The bill also contains workforce provisions in line with the nation-leading standards that were set in CEJA, including requiring a minimum equity standard and requiring Project Labor Agreements.

This action builds on the state's landmark Climate and Equitable Jobs Act, which set a national standard for aggressive decarbonization goals by pledging to be completely reliant on clean energy by 2050. Investing in clean hydrogen is a key component of decarbonizing the transportation, manufacturing, and agriculture industries. By jumpstarting the hydrogen market in the Midwest, the state of Illinois will add to its robust number of clean energy jobs and bring down the cost of clean energy alternatives for those who reside here. Prioritizing clean hydrogen will lead to reduced pollution, enhanced energy security and improved public health conditions for all Illinoisans. Simultaneously, the status of globally competitive industries will be protected, and emerging industries will be encouraged to increase their footprint in the Midwest.

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