Certain overlooked provisions of President Trump’s “Big Beautiful Bill” have set the stage for US hydrogen growth.
Twenty years ago this month, President George W. Bush signed the Energy Policy Act of 2005 into law, directing the Department of Energy to explore and conduct research on “technologies related to the production, purification, distribution, storage, and use of hydrogen energy, fuel cells, and related infrastructure.”
Since then, American companies have made significant investments in hydrogen and fuel cell manufacturing, research, development, and deployment across the country —in both red and blue states — in order to support American competitiveness and energy diversity. Now, this US industry is ready to take its place in the global development of hydrogen technologies, and the One Big Beautiful Bill Act (OBBBA), signed into law by President Trump on July 4, reinforces the technology foresight of President Bush by providing the US hydrogen industry with the investment flexibility and support it needs to grow. President Trump and Congress have sent a clear signal that the United States is serious about competing in a constantly evolving energy economy.
The broad US hydrogen industry — spanning large multinationals, industrial gas companies, startups, and component makers — needed collective measures to expand and strengthen US hydrogen production capacity and American energy leadership. The OBBBA gives our industry the boost it needs.
From electrolyzer plants in Tennessee to clean ammonia projects in Louisiana and heavy-duty truck pilots in Georgia to transit buses in California, hydrogen is already attracting major private sector investment. The OBBBA ensures those projects have a clear runway and positions the United States to lead the global hydrogen race by exporting the technologies, components, and standards that will define the next era of energy leadership.
The cornerstone of the OBBBA’s hydrogen provisions is the Section 45V hydrogen production tax credit. The law set a new commencement construction date of January 1, 2028, a significant improvement over prior proposals. With this new date set, hydrogen projects have the critical runway needed to get off the ground.
Furthermore, the transferability provision was preserved, meaning eligible entities may either receive a refund or direct payments from the government, or they can sell their clean energy tax credits to another business. This will allow hydrogen companies to monetize and sell the benefits of the credits in an open market, reducing investment costs.
While experts and pundits have been dissecting how the individual credits in the OBBBA fared, what has been missing from the conversation for our sector is that it was not just the 45V credit but the full suite of complementary incentives that were included or extended that are able to work together to support scaling this industry.
Of note, the landmark changes to America’s energy tax policy also included preserving the investment tax credit (ITC) for hydrogen storage property, as well as reviving the ITC for fuel cell technologies. These credits help to reduce the costs of midstream storage and of providing reliable power to consumers. The storage credit is particularly vital, as it includes a thirty percent credit for all hydrogen tanks, underground storage facilities, limited pipelines, and compression and liquefaction equipment. The fuel cell credit recognizes the technology’s unique environmental and resiliency benefits and will help drive the adoption of this power generation option to serve critical applications like data centers, hospitals, and more.
This suite of credits and provisions, along with the incentives for carbon capture and clean fuel production, offers multi-faceted support for investments in US energy systems that can include the production of domestic hydrogen for use as a direct fuel or in the production of derivatives such as ammonia, methanol, and sustainable aviation fuel (SAF); hydrogen storage that can support industrial uses and grid reliability; and the installation of fuel cell power plants to meet ever-growing power demands.
Passing legislation was only the first step. With supportive policies now in place, the industry is ready to keep investing in order to show that hydrogen projects will continue fueling America’s energy future with new domestic energy resources. Hydrogen power will also equip the country with the potential to export key industrial commodities and provide the country with the ability to add clean, quiet, and efficient power to the US grid.
About the Author: Frank Wolak
Frank Wolak is the President and CEO of the Fuel Cell and Hydrogen Energy Association (FCHEA). Prior to FCHEA, Mr. Wolak was a Senior Vice President at FuelCell Energy, Inc. During his tenure at FuelCell Energy, Mr. Wolak initiated and developed some of the most innovative and largest fuel cell technology applications in the world and worked closely with the US Department of Energy and Congress to define and sustain programs for hydrogen and fuel cells.Mr. Wolak holds a Bachelor of Science in Mechanical Engineering from Western New England University and an MBA in Finance from the University of Hartford.
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