A powerful coalition of nearly 250 companies, trade associations, and labor organizations is calling on Senate Republicans to preserve a key federal tax credit that supports the burgeoning U.S. hydrogen energy industry. The appeal, made in a letter dated June 5, 2025, underscores growing concern among industry stakeholders that without congressional action, the United States could lose its competitive edge in clean hydrogen development to foreign rivals—most notably China.
The group urged Senate Majority Leader John Thune (R-SD) and Senator Mike Crapo (R-ID), ranking member of the Senate Finance Committee, to reinstate and extend the 45V tax credit for hydrogen projects. The credit, originally introduced under the 2022 Inflation Reduction Act (IRA), offered generous incentives for low-carbon hydrogen production but is now set to expire for new projects starting after 2025, following House legislation passed earlier this year.
Economic Stakes and Strategic Concerns
The 45V credit has been central to catalyzing private investment in clean hydrogen, a technology viewed as essential for decarbonizing heavy industries like steel, cement, and long-haul transportation. The letter warned that eliminating the credit prematurely would derail the momentum of billions in planned hydrogen investments and send U.S. capital and innovation overseas.
“Without this credit, the United States risks ceding leadership in hydrogen production to countries like China, which are aggressively expanding their clean energy portfolios,” the coalition wrote. They urged Congress to extend the construction start deadline to December 31, 2029, giving developers more time to launch projects and secure long-term financing.
Among the signatories were influential names like the American Petroleum Institute, DuPont, and several clean energy and labor groups, representing a rare alliance of traditional fossil fuel players and climate-focused organizations. Their unified message emphasized that continued federal support for hydrogen is not only an environmental necessity but also an economic imperative.
Origin and Impact of the 45V Credit
The 45V tax credit was a centerpiece of the Biden administration’s climate strategy, designed to jumpstart a domestic hydrogen economy by offering up to $3 per kilogram of clean hydrogen produced, depending on the carbon intensity of the production process. Under the original IRA framework, projects had until 2033 to begin construction and still qualify for the incentive.
The program aimed to level the playing field between clean hydrogen and its fossil-based counterpart, known as “gray” hydrogen, which remains cheaper but produces significantly more greenhouse gas emissions. Since its enactment, the credit has spurred a wave of interest from utilities, manufacturing firms, and venture capital groups eager to capitalize on the clean energy transition.
However, the recent House proposal to terminate the credit for new projects after 2025 threatens to freeze much of that investment, especially for large-scale facilities that require multi-year planning and permitting processes. Industry leaders argue that a December 2029 extension would provide a more realistic timeframe for project development while maintaining fiscal oversight.
National Security and Job Creation Arguments
Beyond climate and economic considerations, the coalition framed the credit as a matter of national security and job creation. They warned that reducing U.S. hydrogen incentives could open the door for adversarial nations to dominate a critical energy market, undermining American influence over global energy standards and supply chains.
Additionally, the letter emphasized that hydrogen development supports thousands of domestic jobs, particularly in engineering, construction, and high-tech manufacturing. Maintaining the credit, the group argued, would send a strong signal to private investors that the U.S. remains committed to leading the global energy transition.
Political Outlook
The future of the 45V credit now hinges on Senate negotiations. While Democrats have broadly supported maintaining and even expanding clean energy incentives, the GOP-led House has targeted several IRA provisions for rollback, citing concerns about federal spending and market distortions.
Senators Thune and Crapo have not yet commented on the coalition’s letter. However, some moderate Republicans and business-friendly conservatives have expressed openness to preserving certain climate incentives—especially those with strong ties to domestic industry and national competitiveness.
With the 2026 midterm elections looming and energy independence becoming an increasingly salient issue, the hydrogen tax credit has emerged as a key flashpoint in the broader debate over America’s energy future.
