On June 5, 2025, a coalition of nearly 250 U.S. companies, labor unions, and industry groups—including the American Petroleum Institute, DuPont, and the International Brotherhood of Electrical Workers—sent a letter to Senate Republican leaders urging them to preserve the Section 45V tax credit for clean hydrogen production. The coalition emphasized that eliminating the credit could jeopardize billions in investments and shift innovation overseas, particularly to China.
The 45V tax credit, established under the Inflation Reduction Act of 2022, offers up to $3 per kilogram of clean hydrogen produced, depending on the carbon intensity of the production process. The credit is designed to incentivize the development of clean hydrogen technologies, which are considered essential for decarbonizing sectors like heavy industry and transportation.
However, the Republican-led House of Representatives recently passed a bill that would terminate the 45V credit for projects beginning construction after December 31, 2025. This move has raised concerns among industry stakeholders, who argue that the sudden cutoff could derail planned projects and cede U.S. leadership in the global hydrogen economy to competitors like China.
In their letter, the coalition urged Senate Majority Leader John Thune and Senate Finance Committee Chairman Mike Crapo to extend the construction deadline for hydrogen projects to December 31, 2029. They argued that this extension is necessary to provide the industry with the certainty needed to plan and execute large-scale projects.
The potential loss of the 45V credit has already had tangible effects on the industry. For example, Air Products canceled a planned green hydrogen facility in New York earlier this year because it was ineligible for the credit. Similarly, HIF Global warned in 2022 that its e-methanol plant in Texas would be “uneconomic and could not be constructed” without tax credits.
Analysts estimate that if the 45V credit is terminated, up to 95% of announced green hydrogen projects could be at risk. The industry is still in its early stages, and clean hydrogen remains more expensive than conventional hydrogen produced from natural gas. Without subsidies, many projects may not be financially viable.
The debate over the 45V credit comes amid broader discussions about the future of clean energy policy in the United States. While some lawmakers argue that cutting subsidies is necessary to reduce government spending, others warn that doing so could undermine the country’s competitiveness in emerging industries. The outcome of this debate will have significant implications for the U.S. hydrogen industry and its role in the global energy transition.
As the Senate considers the proposed changes to the 45V credit, industry stakeholders continue to advocate for policies that support the growth of clean hydrogen. They argue that maintaining the credit is essential for stimulating private investment, creating jobs, and ensuring that the United States remains a leader in the development of clean energy technologies.
