Biden eases rules for hydrogen tax credits in bid to boost sector ahead of Trump
Jan. 03, 2025 10:52 AM ETConstellation Energy Corporation (CEG) Stock, VST StockFCEL, LEU, PLUG, NLR, LTBR, URA, URNM, SMR, OKLO, NNEBy: Carl Surran, SA News Editor
The Biden administration loosened some safeguards on a tax credit worth billions of dollars for production of so-called clean hydrogen, Bloomberg reported Friday.
The tax credit created by the Inflation Reduction Act, President Biden's 2022 climate law, now includes a carve-out sought by companies including Constellation Energy (NASDAQ:CEG) and Vistra (NYSE:VST) that will benefit some existing nuclear power plants, according to final rules released by the Treasury Department; CEG +3.5% and VST +6.6%.
The rules also provide pathways for hydrogen made from natural gas with carbon capture systems, methane and renewable natural gas to receive the tax credit, helping lift shares of Plug Power (PLUG) and FuelCell Energy (FCEL), +1.5% and +10.9%, respectively.
Other potentially relevant stocks showing gains include Nuscale Power (SMR) +10.7%, Lightbridge (LTBR) +15.5%, Oklo (OKLO) +16.6%, Centrus Energy (LEU) +6.9%, Nano Nuclear Energy (NNE) +6.3%.
The new rules say that up to 200 MW of a reactor's power generation capacity can be considered new clean power and collect the credits, if they were otherwise at risk of shutting down due to poor economics.
The rules also allow natural gas-fired facilities that produce hydrogen to access the credits if they install equipment to capture and bury their carbon dioxide emissions.
It is unclear how the incoming Trump administration will approach hydrogen production.
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