As the U.S. hydrogen sector awaits the fate of the hydrogen production tax credit meant to sweeten project economics and lower emissions, stakeholders have not given up hope for a breakthrough with senators.

But some are preparing to make the next move to grow the sector under the Trump administration.

“Hydrogen needs to rebrand itself right now with this administration,” said Andrew Temple, director of government affairs for Plug Power. “Folks are doing that. We’re doing that. I think where we can marry hydrogen with priorities like nuclear, that’s a real opportunity.”

He sees hydrogen being used to restart or grow nuclear sites or for sustainable aviation fuel production—both of which appear to be favored by the Trump administration.

“Hydrogen is so unique in that it can play into all those spaces,” Temple said June 25 during the Hydrogen Technology North America Expo in Houston. “We just have to now message it appropriately and get it in those conversations.”

Frank Wolak, president and CEO of the Fuel Cell and Hydrogen Energy Association, sees opportunity with natural gas for hydrogen production via methane pyrolysis, a process that involves heating natural gas until it breaks down into carbon and hydrogen. The hydrogen created from this process is called blue hydrogen.

Hydrogen can also be used to create synthetic fuels, or e-fuels, by combining it with carbon. CO2 captured during the blue hydrogen process can also be used for EOR.

“If you can engineer CO2 that can be used for enhanced oil recovery, you create predictable volumes of CO2 that might be in a strange kind of way sustainable because you’re taking old oil wells and reusing them,” Wolak said. “Those kinds of conversations didn’t really happen very much in the past administration. They could be conversations that happen with this administration and Congress.”

Electrolytic hydrogen (green) and low-carbon hydrogen with CCS (blue) have dominated the conversation, but other forms of hydrogen production involving fossil fuels and nonrenewable energy sources such as nuclear may take the spotlight.

The hydrogen discussion took place as the U.S. Senate continues work to finalize the reconciliation bill, which includes a slew of clean energy tax credit cuts. Trump’s so-called “One Big Beautiful Bill” would eliminate the 45V hydrogen production tax credit at the end of 2025, which is about seven years earlier than its original 2033 end. The accelerated timeline could put some clean hydrogen projects in danger.

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The bill was approved by the House and awaits a vote in the Senate. Legislators are targeting a vote before July 4. Like the House version, the Senate Finance Committee’s version of the bill released June 16 terminates the hydrogen production tax credit by the end of 2025, despite pleas about a week earlier from nearly 250 companies and labor groups to keep the credit in place.

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Not dead yet

The hydrogen sector is in a tenuous position, Wolak said. The association, which has about 100 members, has been working alongside other groups to convince legislators to extend the tax credit to Dec. 31, 2029, so that projects can be developed.

“Any day now we will see what the Senate has done with their version of reconciliation. I remain, as I run a national trade association, optimistic. We put together a lot of work and every day there are more senators who are coming in and weighing in on support for retaining 45V or extending the debate,” Wolak said. “That’s not over with yet.”

The credit provides a per kilogram subsidy to hydrogen producers based on lifecycle greenhouse gas emissions. The tiered credit, one of the many clean energy incentives offered by former President Joe Biden’s signature Inflation Reduction Act climate legislation, ranges from 60 cents per kg to $3 per kg, improving the economics of clean hydrogen projects that are typically more expensive than predominant production methods with higher carbon intensities.

“I think if 45V stays in place, you will see the movement that is now dormant from project development—whether that’s in efuels, ammonia, hydrogen for various mobile activities, the hubs themselves—move from what is now a dormant state into various places of moving transactions closer to FID, getting engineering started and trying to take advantage of the credit if it is extended,” Wolak said.

The status of 45V is not the only worry when it comes to hydrogen development in the U.S. The Trump administration has attacked wind and solar generation projects and the Department of Energy has pulled back funding from some carbon capture and sequestration (CCS) projects, said Courtney Shephard, a shareholder for Greenberg Traurig. CCS is a key component of hydrogen processes that use natural gas as feedstock and CCS to lower emissions. Wind and solar projects are needed to provide electricity to power electrolyzers, which split water molecules into hydrogen and oxygen.

Adding to this is the Environmental Protection Agency’s proposed rule seeking to roll back power plant greenhouse gas standards that relied on CCS.

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“So unfortunately, 45V is not solving that problem,” Shephard said. “I think we need more of a cohesive policy approach in order to make it workable if it survives. … We are, I guess, on the positive side starting to see some developments with NEPA that potentially can make the National Environmental Policy Act a little bit more palatable for these projects to the extent that they have a federal hook.”

Looking ahead

If 45V goes away, the U.S. market will remain dormant but smaller projects, R&D and demonstrations will continue, Wolak added. “That’s not capitalizing on the opportunity that the U.S. has. So, without 45V we see a major setback of the U.S. being a world player in hydrogen.”

Service providers and others looking to participate in hydrogen may seek opportunities elsewhere.

It’ll be on the U.S. hydrogen industry to be the change it seeks, given the shift in priorities of federal agencies like the Department of Energy that have played vital roles in R&D efforts and deployment of technologies such as fuel cell systems.

“You’ll see industry coalitions be a much larger player along with companies in setting priorities and pathways of where we go next,” said Temple. “You’ll see companies driving collaborations amongst themselves a little bit more rather than … [leaning] on DOE for some of those connections. I think we’ll see state and regional leadership also become a much more important piece here.”

This could include streamlining permitting processes and turning net-zero emissions goals or roadmaps into policies, Shephard said.

The effort may require an education campaign in some areas, according to Temple. Companies might also gravitate more toward near-term opportunities and quicker time to market projects. He added that hydrogen will continue to grow in areas where the industry is already present—the Gulf Coast.

“I think what we’re going to see is kind of a retrenchment a little bit on that next wave of stuff,” he said.

Hydrogen use has been around for decades, mainly used in industrial processes such as ammonia production for fertilizer and in oil refining. But the push to lower emissions has opened up new and emerging applications such as for transportation fuel, steel and cement production, synthetic fuel production, power generation, heating and energy storage.

“It’s going to be a real shame if the federal government that really started this industry steps out of it and doesn’t take a leadership role in setting what the next wave of investments are going to be,” Temple said. “Industry will certainly do it. So, I’m not concerned about that stopping at all, but I think what we really are going to be missing is that longer-term strategic vision because we’re going to be looking more for private capital now, more on the investment side, and those types of inputs don’t necessarily gravitate toward longer term lead items.”

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