As Congress gets close to its self-imposed July 4 deadline for finalizing a reconciliation bill, one nascent corner of the clean energy economy is feeling optimistic about its chances.
The entire hydrogen industry is tightly aligned on preserving the 45V tax credit for another five years, said Frank Wolak, who leads the Fuel Cell and Hydrogen Energy Association. They’re executing a “surgical” approach to achieve that end, he added — and are gaining traction.
“If senators really thought this was game over [for 45V] and they didn’t want to waste time on hydrogen, they would be telegraphing that,” he added. Instead, he said, key lawmakers are still taking the industry’s calls and meeting with them during fly-ins.
The version of the so-called “Big Beautiful Bill Act” passed by the House proposed ending the credit at the end of 2025. The Senate finance committee’s markup suggested a phase-out, also starting this year.
The hydrogen industry has been actively working to “reinforce the merits of the industry” to the Trump administration since before the inauguration, Wolak explained. But in the past few weeks the strategy has sharpened and the messaging has changed, he added, to something “much more tactical.”
Meetings with stakeholders on Capitol Hill have evolved: from a focus on the broad value of developing hydrogen markets and jobs, to prioritizing states that have a vested interest in sustaining hydrogen work already underway. That includes places like Louisiana, West Virginia, Texas, and Utah, all of which are part of federally funded hydrogen hubs. (The hub stakeholders themselves have also been active in rallying behind 45V, and last week all seven signed onto a letter last week urging the Senate to maintain the credit, arguing it is essential to the success of the projects.)
An intense focus on those states has brought more senators “into the fold,” Wolak said. The initial target list included Louisiana Sen. Bill Cassidy (R), a longtime hydrogen advocate who argued the Biden administration’s clean hydrogen definitions made it too hard for U.S. producers to qualify for 45V, and West Virginia Sen. Shelly Capito (R), who has been a strong advocate for the Appalachian Regional Clean Hydrogen Hub.
“What’s happened over the past several weeks is the list of senators…who have been very interested in the subject but we couldn’t tell whether they wanted to weigh in or not…starting to weigh in,” Wolak said. That includes West Virginia’s Jim Justice, Louisiana’s John Kennedy, and Texas’ John Cornyn, as well asUtah’s John Curtis, Kansas’ Jerry Moran, and Pennsylvania’s Dave McCormick, all Republicans.
“McCormick is someone who’s kind of come into the fold, who was on the fence,” Wolak explained. Pennsylvania is set to house portions of two federally funded hydrogen hubs — the Mid-Atlantic Hub and the Appalachian Hub. McCormick, who was elected to the Senate last year, chairs the Committee on Energy and Natural Resources’ subcommittee on energy, has focused on “unleashing” oil and gas production in the state. But according to Wolak, McCormick “realized quickly that he could be supportive.”
A ‘simple ask’
In the wake of November’s elections, the domestic hydrogen sector was generally optimistic that the tax credit would remain intact, in large part because hydrogen has long enjoyed bipartisan support. At the time, they were much more worried about the still-unresolved guidelines about which projects could qualify for the 45V credit, and the potential for litigation when the rules were finalized.
As Jacob Susman, CEO of developer Ambient Fuels, put it to Latitude Media last fall, “we don’t think they’re coming for hydrogen first.”
The version of the reconciliation bill passed by the House in May, of course, rendered much of the 45V debate extraneous, at least in the short term. The draft terminates the credit for any facilities not already under construction by the end of 2025, an extremely challenging timeline for massive industrial projects — and one that essentially knocks the hubs out of the running.
In the wake of that bill, the hydrogen industry has put any discussion over the guidance specifics to the side, and has instead focused on educating key senators on “the real cost benefit” of hydrogen projects, Wolak said.
It’s a strategy that is quite distinct from broader, clean energy sector work to shore up support.
For one thing, the hydrogen industry is smaller and more nascent, and is entirely aligned on a single ask: Extend the 45V credit to December 31, 2029.
“The Senate and House were not going to want to litigate among the industry,” Wolak explained. “There was a lot of pressure from congressional and Senate supporters to come in with a common ask…not hearing different things from different people.” The small nature of the hydrogen sector meant that the coalition “came to consensus” on that ask relatively quickly, he added.
Funding for the hydrogen hubs, though essential for the industry, isn’t part of that ask, partly because the fate of federal funding for those projects will be determined by the Department of Energy.
“The messaging that we’re doing about the value of 45V and the communication that’s going on with congressional leaders who have an interest in the hubs kind of ties together,” Wolak said. “We don’t want to lose the funding for the hubs…but it’s a little different from the Big Beautiful Bill that actually has language that eliminates the tax credit.”
But there are a few other key messages that Wolak said are resonating with their target list of Senators.
The first is about the threat of China. Unlike the solar manufacturing sector and others in clean energy, the hydrogen sector is arguing that “there’s still a chance, if we maintain stability, to get out ahead of China,” Wolak said. “Ceding American leadership gets a reaction.”
When it comes to hydrogen, he added, “there can still be a return on investment in the U.S., and that’s a different story than just the solar jobs, or the value to the grid.”
The other key message, Wolak said, comes down to cost compared to local economic impact: 45V is a $7 billion line item in a $3 trillion bill. In the wider context of the bill, and compared to some other IRA tax credits, 45V just isn’t that expensive, he added. And the industry hopes that will make saving it an easier sell to a few Senators.
“You don’t need to message that to 50 Senators,” he added. “You just need a handful to make sure it’s high priority and find room for it.”
At a crossroads
The domestic hydrogen sector is overall “optimistic” that the final version of the bill will expand 45V’s timeline, Wolak said. That said, they are also clear-eyed about the fact that the outcome of the bill will almost single-handedly determine what happens next for domestic hydrogen.
If the tax credit is extended to meet the industry’s ask, Wolak said, it will allow enough projects to “matriculate” that the beginnings of a strong U.S. industry will emerge, “whether it’s ammonia, whether it’s direct hydrogen, whether it’s e-fuels…you’ll see that activity happen because the credit is valuable.”
If Congress ultimately decides to stick to initial drafts and cut 45V off for projects that don’t break ground before the end of the year, the domestic market will rapidly become “stagnant,” he added
“You’ll have an industry where there [is] investment poised to come in to take part in an American market, and American companies who are looking to build upon a U.S. market,” he said. “And they’re going to have to look for opportunities overseas for developing markets that are continuing to grow hydrogen.”
Some domestic activity of course will continue, though it won’t be the same.
“Companies are going to do pilot projects, they’re going to continue to research,” Wolak added. “But it will be an industry in idle compared to the rest of the world.”
