Hydrogen's Make-Or-Break Moment: Industry Awaits Key Treasury Decision On Tax Credits
Portfolio Pulse from Natan Ponieman
The hydrogen industry is awaiting a key decision from the Treasury on how subsidies should be regulated, which could be a make-or-break moment for the sector. The Inflation Reduction Act of 2022 authorized a program called 45V, which allows a tax credit for hydrogen producers if the hydrogen is generated from emission-free sources. However, only 11 out of 115 hydrogen projects announced by the Biden administration had secured capital commitments by August of this year. The Treasury is yet to issue guidance on how to measure hydrogen emissions. Companies like Plug Power, Air Products, BP, Bloom Energy, and FuelCell Energy, as well as ETFs like Global X Hydrogen ETF, Defiance Next Gen H2 ETF, and Direxion Hydrogen ETF, could be affected by the Treasury's decision.
November 01, 2023 | 1:43 pm
News sentiment analysis
Sort by:
Ascending
NEUTRAL IMPACT
Air Products has supported the 'three-pillars' approach to tax credits, which proposes that electricity for hydrogen production has to come from newly-built sources of clean electricity, and not from the existing grid. The company could be affected by the Treasury's decision.
Air Products has supported a specific approach to tax credits for hydrogen production. If the Treasury's decision aligns with this approach, it could benefit the company. However, if the decision goes in a different direction, it could negatively impact Air Products.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
Bloom Energy could be affected by the Treasury's decision on how subsidies for hydrogen production should be regulated.
As a company involved in the hydrogen industry, Bloom Energy could be affected by changes in the regulatory environment, specifically in relation to subsidies for hydrogen production.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
BP could be affected by the Treasury's decision on how subsidies for hydrogen production should be regulated.
As a company involved in the hydrogen industry, BP could be affected by changes in the regulatory environment, specifically in relation to subsidies for hydrogen production.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
FuelCell Energy could be affected by the Treasury's decision on how subsidies for hydrogen production should be regulated.
As a company involved in the hydrogen industry, FuelCell Energy could be affected by changes in the regulatory environment, specifically in relation to subsidies for hydrogen production.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
Defiance Next Gen H2 ETF could be affected by the Treasury's decision on how subsidies for hydrogen production should be regulated.
As an ETF following the hydrogen industry, Defiance Next Gen H2 ETF could be affected by changes in the regulatory environment, specifically in relation to subsidies for hydrogen production.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
Direxion Hydrogen ETF could be affected by the Treasury's decision on how subsidies for hydrogen production should be regulated.
As an ETF following the hydrogen industry, Direxion Hydrogen ETF could be affected by changes in the regulatory environment, specifically in relation to subsidies for hydrogen production.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
Global X Hydrogen ETF could be affected by the Treasury's decision on how subsidies for hydrogen production should be regulated.
As an ETF following the hydrogen industry, Global X Hydrogen ETF could be affected by changes in the regulatory environment, specifically in relation to subsidies for hydrogen production.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
Plug Power's business model might have been designed around a dependency on government subsidies. The company's fate could hinge on the Treasury’s decision on whether tax benefits from the IRA can only go to companies using renewable electricity to produce hydrogen.
The company's business model might be heavily dependent on government subsidies. If the Treasury decides that tax benefits can only go to companies using renewable electricity to produce hydrogen, it could significantly impact Plug Power's operations and financial performance.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90