Hydrogen Tax Credit Rescue ‘On the Table,’ Key GOP Senator Says

(Bloomberg) -- The Senate is considering a plan to save a lucrative tax credit for the production of hydrogen that would be scrapped in the tax-and-spending mega bill passed by the House, key Republicans said. 

“That’s on the table,” said Senator John Cornyn, a Texas Republican who serves on the Senate’s tax writing committee and has hydrogen projects that would benefit from the incentive in his home state. 

The incentive was one of several from President Joe Biden’s climate law that would be curbed in the House’s megabill in an effort to help offset the cost of extending President Donald Trump’s tax cuts. However billions of dollars in investments already have been made in hydrogen projects that are depending on the tax break.

The incentive, which provides as much as $3 per kilogram of hydrogen production, would end for projects that begin construction after the end of this year under the House-passed bill. It was meant to spur a domestic industry for the clean-burning fuel and is currently in place through 2033. 

Senator Shelley Moore Capito, chair of the Senate’s environmental committee who has a hydrogen project in the works in her home state of West Virginia, said extending the time projects have to qualify for the incentive is being discussed.

“We have to make it reasonable so we can get our hubs under construction,” Capito said in an interview. 

The discussions to save the credit come amid a lobbying effort being led by groups that include the American Petroleum Institute and the US Chamber of Commerce who are asking Senate leaders to retain the credit for projects that begin construction by at least the end of 2029. 

“Anything less puts billions in committed investments — and tens of thousands of jobs —at risk,” the groups said in a letter last week that also was signed by hydrogen producers including Plug Power Inc. and Cummins Inc.

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