Drillers, Unions Urge US Senators to Preserve Hydrogen Credit

WASHINGTON, June 5 (Reuters) – A coalition of nearly 250 companies and business and labor groups on Thursday urged top U.S. Republican senators to preserve a credit for the emerging hydrogen fuel industry as they hash out President Donald Trump’s tax and spending bill.

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Oil and gas lobbying group the American Petroleum Institute, a local unit of the International Brotherhood of Electrical Workers, and DuPont (DD.N) urged Senate Majority Leader John Thune and Senator Mike Crapo to extend the construction deadline to December 31, 2029 for hydrogen projects to receive a tax break.

The Senate is debating its version of the bill after the House of Representatives terminated the so-called 45V credit for any project which begins construction after the last day of 2025.

“If this course of action is adopted by the Senate, it will drive tens of billions of dollars in planned private sector investments out of the United States and into other countries,” the groups said in a letter to the senators, dated June 5. “Failing to act now by preserving 45V means ceding the future of hydrogen to China.”

The Business Council for Sustainable Energy and the Nuclear Hydrogen Initiative also signed the letter.

House Republicans slashed the credits which had been included the Inflation Reduction Act, the landmark climate legislation signed by former President Joe Biden, a Democrat. Under the IRA, hydrogen producers got tax credits for projects that began construction before 2033.

Industry analysts say clean hydrogen, or hydrogen produced from non-fossil energy sources, or natural gas paired with technology to capture carbon emissions and store them underground, is needed to decarbonize heavy industry and some vehicles.

The letter said clarity from lawmakers would spur tens of billions of dollars in private capital, boost domestic manufacturing, and create long-term employment in construction, operations, and technology.

Reporting by Timothy Gardner Editing by Nick Zieminski