Hydrogen Central

Hydrogen industry expects emissions rules for US subsidies to loosen under Trump

hydrogen industry trump

Hydrogen industry expects emissions rules for US subsidies to loosen under Trump

US hydrogen subsidies are not just likely to survive the upcoming Trump administration but may be even easier to obtain with looser emissions standards for the alternative fuel, industry members said after the Nov. 5 election.

Analysts say the nascent hydrogen industry would be especially vulnerable if a potential Republican trifecta — including the White House, Senate and House of Representatives — were to claw back the US Inflation Reduction Act’s clean energy subsidies. Hydrogen stakeholders, however, cast doubt on the possibility of a repeal, even after Republicans were declared winners of the White House and Senate by Nov. 6, leaving only the House to be declared.

Andy Marsh, CEO of hydrogen company Plug Power Inc., said in an interview.

It probably would have been easier for us if [the Democratic nominee, Vice President Kamala] Harris won,

“But we’ve worked with fuel cells and hydrogen with Republicans for a long time. It is not nearly as controversial as things like wind [energy].”

Marsh added,

If anything, securing hydrogen production tax credits may get easier,

A representative of electrolyzer manufacturer Nel ASA, reacting to the election results on Nov. 6, was less confident than Marsh of hydrogen’s fate under President-elect Donald Trump.

Constantine Levoyannis, the Norwegian company’s head of government affairs, wrote in a LinkedIn post,

The only predictable thing about Trump is his unpredictability,

That said, Levoyannis doubted Trump would “completely gut” the Inflation Reduction Act, though he may “delete” or tweak provisions.

Hydrogen tax credits

One target could be the law’s hydrogen tax credit program, called 45V. The incentive is available to hydrogen producers that use clean electricity, carbon capture technology or other methods to minimize their emissions.

In December 2023, the US Treasury Department proposed requirements for hydrogen producers seeking those credits, including stringent rules on electricity sourcing. The European Union has set similar standards to prevent hydrogen plants from overloading the power grid.

Industry members criticized Treasury’s draft rules on electricity, calling them unrealistic, but climate groups argue the rules — dubbed the three pillars — are needed to keep hydrogen from defeating its purpose as a clean energy source.

In October, a Treasury official said the department intended to finalize those rules with “appropriate adjustments” by the end of this year. Whether or not the Biden administration meets its deadline, industry watchers say Trump would not need Congress’ permission to reinterpret the IRA’s ambiguous definition of clean hydrogen.

If the Biden administration’s final rules are “very rigid, that’s going to send a message bubble,” Frank Wolak, president and CEO of the Fuel Cell and Hydrogen Energy Association, said in an interview.

What is the Trump administration going to do about that?

Some industry members expect an easing of environmental safeguards.

Levoyannis said,

One thing’s for sure in my eyes: Trump will not follow EU laws and guidelines,

“More likely than not, proposed 45V guidelines will be watered down, whereas a Democrat victory would’ve meant status quo and alignment with Europe on environmental laws.”

Marsh agreed the tax credit rules would get “easier,” but for legal reasons rather than ideological ones. Industry members and some senators have argued that the Treasury’s proposal was never called for in the IRA, though other lawmakers who voted for the bill have disagreed with that assertion.

Wolak said,

Remember, the three pillars don’t exist,

“They don’t exist in the law. They only exist in the form of introductions of guidance interpretations resulting from the law.”

Other election impacts

Not all energy industry stakeholders have ruled out the possibility of an IRA repeal. The impact on hydrogen would be especially severe compared to other more mature market segments, such as utility-scale renewables and grid efficiency technologies, Piper Sandler & Co analysts wrote in a Nov. 6 research note.

Republican lawmakers have also scrutinized the US Energy Department’s Loan Programs Office, which received a big boost under the Biden administration. In June, Senator John Barrasso, Republican-Wyoming, called for a probe of the DOE’s $1.66 billion federal loan commitment to Plug Power.

Marsh said Plug Power and the DOE are working to close the deal before Trump’s inauguration.

Levoyannis said,

Another threat to hydrogen companies may be Elon Musk, who has officially become a political figure now,

The Tesla Inc. co-founder and CEO has been a skeptic of hydrogen fuel cell vehicles.

Levoyannis added,

Musk’s views on hydrogen are well documented and a few weeks ago, Trump made statements about hydrogen cars ‘blowing up everywhere’ and how he would not support hydrogen,

When asked about Musk’s influence, however, Marsh pointed out Trump’s criticism of electric vehicles in the past.

Marsh said,

I don’t know how that works for Elon,

READ the latest news shaping the hydrogen market at Hydrogen Central

Hydrogen industry expects emissions rules for US subsidies to loosen under Trump, source

Get our LinkedIn updates!

Join our weekly newsletter!

Follow us

Don't be shy, get in touch. We love meeting interesting people and making new friends.