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Biden Pressed to Limit Hydrogen Credits Key to New Industry

  • Activists want tax incentive reserved for new, clean power
  • Advocates say restrictions could suppress industry’s promise
Joe Biden

Joe Biden

Photographer: Drew Angerer/Getty Images
Updated on

Some Senate Democrats are pushing the Biden administration to impose tough limits on hydrogen tax credits they say will ensure the fuel lives up to its climate-fighting potential. Hydrogen advocates warn that could end up stifling the nascent industry instead. 

The campaign is aimed at the US Treasury Department, which is writing rules for claiming the tax credit worth as much as $3 for every kilogram of hydrogen produced over a decade. The Biden administration is counting on the fuel to decarbonize power plants, clean up heavy industry and meet climate targets. And the incentive created in last year’s landmark climate law is essential to driving tens of billions of dollars in spending on hydrogen production and manufacturing electrolyzers to extract the gas from water.