The Senate’s version of the budget reconciliation bill, which was released earlier this week, is somewhat more generous to clean-energy initiatives than the House version but retains a provision to effectively end the 45V tax credit for clean hydrogen production. Backers of the tax credit, including a coalition of more than 200 companies and industry groups, have lobbied the Senate to keep the credit in place until at least 2029.
As we noted recently in Danger Zone, under the Inflation Reduction Act (IRA), hydrogen projects that begin construction before 2033 are eligible to receive the credit, which tops out at $3/kg (see chart below). If the budget bill is passed without any changes to the wording around 45V, projects that begin construction after December 31, 2025, would no longer be eligible — essentially ending any long-term incentives for clean hydrogen production.
