U.S. Companies and Labor Groups Push for Tax Credit Extension to Boost Hydrogen Industry
Key Ideas
- A coalition of 250 companies and business and labor groups urges U.S. senators to extend the construction deadline to 2029 for hydrogen projects to receive a tax break.
- The House of Representatives terminated the 45V credit for hydrogen projects beginning construction after 2025, prompting concerns about losing private sector investments to other countries.
- Industry analysts emphasize the importance of clean hydrogen in decarbonizing heavy industry and vehicles, highlighting the need for legislative clarity to attract private capital and boost domestic manufacturing.
- The push for extending the tax credit aims to create long-term employment opportunities in construction, operations, and technology within the hydrogen sector.
A coalition consisting of nearly 250 companies, business groups, and labor organizations in the United States has called on top U.S. Republican senators to preserve a tax credit for the emerging hydrogen fuel industry. The American Petroleum Institute, the International Brotherhood of Electrical Workers, and DuPont are among the entities advocating for an extension of the construction deadline to December 31, 2029, to allow hydrogen projects to qualify for the tax break.
The Senate is currently deliberating on the issue following the House of Representatives' decision to end the 45V credit for hydrogen projects commencing construction after 2025. Concerns have been raised about the potential outflow of tens of billions of dollars in planned private sector investments if the credit is not extended, with fears of ceding the future of hydrogen production to countries like China.
The letter addressed to Senate Majority Leader John Thune and Senator Mike Crapo highlights the significance of legislative support in driving private capital investments, enhancing domestic manufacturing capabilities, and creating sustainable employment opportunities in the construction, operations, and technology sectors related to hydrogen production.
Industry experts stress the pivotal role of clean hydrogen, produced from non-fossil energy sources or through carbon capture technology, in tackling carbon emissions in heavy industry and transportation. They emphasize the urgent need for regulatory clarity to attract investments and facilitate the growth of the hydrogen industry within the United States.
The push for preserving the tax credit is seen as a positive step towards fostering innovation, job creation, and economic growth in the hydrogen sector, aligning with broader efforts to advance clean energy technologies and address climate change challenges.