Earlier today, Congress finalized a budget that includes a provision restricting access to the 45V hydrogen production tax credit solely to companies that initiate construction activities prior to the end of 2027.
In response, Ohio River Valley Institute Hydrogen Program Director Tom Torres issued the following statement:
While the Appalachian hydrogen hub may celebrate the delayed repeal of the 45V tax credit, the reality is that the hub’s position is worse than it was six months ago.
Despite the promise of lucrative tax credits and nearly a billion dollars in public funding, the hydrogen hub has lost several partners and projects since first being announced in 2022. Now, Congress has shortened the runway for getting facilities off the ground by five years — a significant blow to the hub’s future.
EQT, Fidelis New Energy, KeyState Natural Gas Synthesis, and other prospective hydrogen producers have just thirty months to start construction on their respective projects. This will be a tough standard to meet and one they’ll need to maintain in order to preserve future eligibility for the tax credit.
The persistent problem with the Appalachian hydrogen hub is that its core operations — the production of blue hydrogen — remain uneconomic. If built, these facilities would contribute relatively little in the way of jobs and income and would increase local pollution. Nothing in today’s action changes that fundamental reality.
This eleventh hour reprieve will likely embolden fossil fuel companies in their efforts to relitigate the now-settled rules for accessing the 45V tax credit. Doing so could mean higher greenhouse gas emissions and increased costs to taxpayers. However, looser rules only matter if the hub can actually deliver and produce hydrogen. So far, there’s little evidence that it will.
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