The hydrogen industry has been one of the most promising frontiers in America’s clean energy transition. But now, its momentum faces a serious threat. The proposed repeal of Section 45V of the Inflation Reduction Act (IRA) - a key hydrogen production tax credit - has drawn sharp criticism from experts, including the Environmental Defense Fund (EDF), and may put thousands of jobs and billions in economic value at risk.
The repeal was part of President Trump’s narrowly passed "One Big, Beautiful Bill," which passed the House by just one vote. The measure would strip future hydrogen projects of their eligibility for the $3 per kilogram credit starting December 31, 2025. This isn’t just a tax change. It’s a move that could pull the plug on a thriving and still-growing sector.
>> RELATED: EDF Slams Repeal of 45V Hydrogen Credit, Citing $32Bn in Higher Household Energy Costs and Job Losses
According to a detailed analysis from Energy Innovation, the repeal could add over $32 billion to household energy costs in the next decade. That impact alone is hard to ignore. But it doesn’t stop there.
The same report projects that GDP losses could exceed $160 billion by 2030, rising to $190 billion by 2035, with the potential for up to 700,000 job losses across the U.S. These aren’t speculative figures - they’re grounded in rigorous modeling.
States like Texas, California, Pennsylvania, Florida, and Georgia stand to lose the most. These states are current leaders in hydrogen and clean tech innovation, housing major hubs for infrastructure, jobs, and innovation.
The EDF's Vice President for Political and Government Affairs, Joanna Slaney, minced no words when addressing the implications of the bill: “This bill is an ugly mess for companies and workers, families and communities."
She added: “There’s nothing beautiful about it," directly calling out the name of the proposal.
Industry players, from electrolyzer manufacturers to large-scale project developers, are warning of a chilling effect if the repeal moves forward. The hydrogen tax credit has been the backbone of the U.S. green hydrogen push, enabling investors to take calculated risks in a still-maturing sector.
Section 45V was never just about reducing emissions. It was a signal to innovators, investors, and state governments that the U.S. was serious about leading the world in clean hydrogen production.
The credit incentivizes low-carbon hydrogen by offering up to $3/kg for qualifying producers. That pricing support has been critical in narrowing the gap between clean hydrogen and fossil-fuel-derived alternatives. By lowering the cost of production, it accelerates adoption across transportation, power, and industrial sectors.
This has allowed companies like Plug Power and Air Products to push forward with large-scale investments in the U.S., laying the groundwork for robust domestic supply chains and long-term energy security.
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While the U.S. debates the future of its hydrogen policy, countries like Germany, Canada, and Australia are doubling down on theirs. Canada has already announced billions in support for clean hydrogen, with major projects underway in Alberta and Quebec.
Globally, the hydrogen economy is expected to reach $500 billion by 2030, with over 1,000 projects announced worldwide, according to the Hydrogen Council. If the U.S. backpedals on support, it risks ceding leadership to other regions that are all too eager to take the reins.
Daryl Wilson, Executive Director of the Hydrogen Council, emphasized in a recent panel: "Supportive policy is the single most important factor in scaling up the hydrogen economy. Without it, private investment simply dries up."
This isn’t just a numbers game. The repeal affects people. The boom in hydrogen projects has led to revitalized industrial towns, new training programs, and the creation of thousands of high-paying jobs. From welders in Texas to engineers in Pennsylvania, families are seeing the benefits of this transition.
Removing the credit undercuts these communities at a critical time. As the U.S. grid evolves to meet growing demand - driven by electric vehicles, heat pumps, and data centers - hydrogen has a unique role in providing long-duration storage and industrial decarbonization.
Hydrogen isn't just clean. It's versatile, scalable, and ready to deploy across sectors that solar and wind alone can't decarbonize.
The Senate has yet to take up the bill, and the Biden administration has signaled strong opposition. Clean energy advocates, climate scientists, and business leaders are uniting behind efforts to preserve Section 45V.
The stakes are high. The repeal doesn’t just threaten emissions targets. It risks unraveling a decade of progress in building a modern, resilient, and globally competitive energy economy.
With mounting pressure from industry coalitions and environmental groups alike, the coming weeks will determine whether the U.S. stays on the path to hydrogen leadership - or steps back as the rest of the world races ahead.
This moment is about more than one tax credit. It’s about how seriously America takes the future of clean energy. Hydrogen is no longer a "future tech" - it's being built now, by real companies, creating real jobs, with real stakes.
Walking away from Section 45V would be a short-sighted move with long-term consequences. The industry needs stability, clarity, and above all, continued commitment.
As EDF and others push back hard, the message is clear: Hydrogen is worth fighting for.
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