In a move that has sent shockwaves through the clean Hydrogen Industry, US House Republicans have introduced legislation to dismantle the pivotal 45V hydrogen production tax credit. The proposal, part of a broader effort to roll back President Biden's climate agenda enshrined in the Inflation Reduction Act (IRA), threatens to severely impede the nation's progress in developing a low-carbon hydrogen economy.

The "One Big, Beautiful Bill" package seeks to extend Trump-era tax policies while simultaneously slashing $6.5 billion in clean energy funding allocated under the IRA. A key component of this initiative is the accelerated expiration of the 45V tax credit, which provides up to $3 per kilogram of clean hydrogen produced. Originally slated to remain in effect until 2033, the proposed legislation would terminate the credit in 2026.

The 45V tax credit, introduced in 2022, has been instrumental in driving significant growth in the U.S. hydrogen sector.

However, the House Republicans' proposal has triggered immediate and fierce opposition from industry advocates. The US Hydrogen Alliance, among others, has issued urgent calls for hydrogen supporters to contact members of the House Ways and Means Committee, urging them to preserve the full value of the 45V credit. The potential loss of this credit threatens to derail numerous ongoing and planned projects.

Furthermore, the proposed legislation also seeks to restrict the 45Q carbon capture tax credit, barring its use by "foreign-influenced" entities. This measure poses an additional threat to hydrogen and carbon capture projects, many of which rely on these tax credits for financial viability.

The U.S. hydrogen industry, already grappling with regulatory uncertainties and delays in the finalization of 45V rules, which were only published in January 2025, now faces a potential collapse in market momentum. The proposed elimination of the tax credit is seen as a significant setback, threatening to stifle innovation and investment in clean hydrogen technologies.

Adding to the complexity, the Trump administration issued an executive order on the day of his inauguration, suspending funding from the 45V while officials reviewed the legislation’s alignment with the administration’s plans. This review and the proposed legislation have created a climate of instability for the developing hydrogen industry.