Hydrogen industry alarmed over leaked tax credit rules - Bloomberg (NASDAQ:PLUG) - Seeking Alpha
Hydrogen industry alarmed over leaked tax credit rules - Bloomberg (NASDAQ:PLUG) | Seeking Alpha
Hydrogen industry alarmed over leaked tax credit rules - Bloomberg
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Plug Power (NASDAQ: PLUG) closed -11.6% and FuelCell Energy ( FCEL) -7.9% in Tuesday's trading after a leaked draft of Treasury Department rules for hydrogen tax credits in the Biden administration's climate law prompted warnings that the requirements may severely hamper the young industry.
The rules, which have not been finalized, include measures sought by environmentalists that would require hydrogen production operations to be powered by wind, solar or other clean power projects built within the last three years to qualify for a $3/kg credit, Bloomberg reported.
DoT guidance reportedly also says hydrogen projects should be supplied with new, clean power sources operating on the same grid on an annual basis through 2027, then on a hourly basis starting in 2028.
"If true, the Biden Administration's proposed strategy for implementing these provisions will fail to get this new industry off the ground," the American Clean Power Association said.
Hydrogen is considered a critical fuel for decarbonizing steel, cement and other heavy industries, and the tax credit is seen as an essential incentive to encourage its development, but environmentalists say strict rules and needed to require hydrogen to be produced with new clean power sources operating on the same grid and during the same time, or it could drive further demand for fossil fuel-based electricity.
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