In the early hours of May 22, the U.S. House narrowly passed the HR 1 reconciliation bill, which includes provisions to terminate the clean hydrogen production tax credit introduced under the 2022 Inflation Reduction Act (IRA). Currently, this credit allows taxpayers to claim up to $0.60 per kilogram of clean hydrogen produced, based on lifecycle greenhouse gas emissions. The incentive applies to facilities beginning construction before January 1, 2033.
However, HR 1 proposes to cut short this eligibility period to December 31, 2025, significantly reducing future investment potential in the hydrogen sector. The bill also seeks to limit the transferability of the 45Q carbon capture credit, which affects integrated hydrogen-carbon capture projects.
Industry advocates, including the American Biogas Council, are urging the Senate to preserve hydrogen and biogas-related provisions, warning that premature phase-outs may hinder innovation and economic growth in clean energy. The Senate is expected to review and potentially revise the bill before it advances to the President.
