Two years after the Inflation Reduction Act (IRA) created significant excitement for clean hydrogen in the U.S., progress has slowed amid uncertainty around policy support. While generous subsidies worth billions remain on hold, the industry is in a state of limbo, with many projects stalled due to unclear qualification rules for tax credits. The U.S. initially seemed poised to lead in hydrogen production, but with a heavy focus on supply and limited incentives to drive demand, the sector faces challenges. Developers are hesitant to make final investment decisions without more clarity on the future of these tax credits, which may not come until after the presidential election. Some experts fear that if the current rigid rules for hydrogen tax credits are maintained, it could hinder the industry’s growth in the U.S. Despite this, projects targeting existing demand sources, such as ExxonMobil’s hydrogen project in Texas, are moving forward, with potential for both domestic use and export. The U.S. hydrogen industry requires a balanced approach to get off the ground and compete globally, with a need for clear, supportive policies to drive both supply and demand.
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