After the passage of the Infrastructure Investment and Jobs Act of 2021 and the Inflation Reduction Act of 2022 by the 117th Congress, the US rapidly advanced the development of its domestic clean hydrogen industry and is aiming to become a global leader for this emerging sector. However, progress in putting steel in the ground has slowed.

The supportive programmes and incentives within the laws—the Regional Clean Hydrogen Hub Program (H2Hub) and the Credit for Production of Clean Hydrogen (45V) being the cornerstones—were meant to provide much-needed certainty for project developers and investors to spur the scale-up of the nascent industry.

Despite support from the Biden administration and Congress, agencies charged with issuing the rules and regulations for these programmes and incentives have moved at a slower pace than anticipated. This puts the US’ ambition to be a global leader into question.

Policymakers and industry must turn the page and look ahead to future challenges facing US projects that will enable achievement of decarbonisation imperatives

The Department of Energy (DOE) continues to advance H2Hub selectees to the first phase of its detailed project planning process. Meanwhile, the Department of the Treasury plans to release its final regulations for 45V before the end of 2024. The 45V rules sparked an intense debate around the methodology used to calculate clean hydrogen carbon intensity.

Though the final regulations are still pending, both policymakers and industry must turn the page and look ahead to future challenges facing US projects that will enable achievement of decarbonisation imperatives.

The last few years have been very focused on developing the supply side for our sector. Now, more attention needs to be given to deploying hydrogen-using technologies and supporting adoption. The DOE set aside $1b of its H2Hub appropriations to implement demand-side support mechanisms to de-risk investments and lower costs for early adopters. However, this funding will be used to support only H2Hub-sponsored projects.

The next Congress can hone in on demand-side support to boost adoption across several hard-to-abate sectors by reintroducing the bipartisan package of hydrogen legislation developed by senators Chris Coons (Democratic senator for Delaware) and John Cornyn (Republican senator for Texas), which includes the Hydrogen for Ports Act, the Hydrogen for Industry Act, the Hydrogen for Trucks Act and the Hydrogen Infrastructure Finance and Innovation Act. Together, these bills will enhance the development of a sustainable hydrogen supply chain and lower costs for applications that have limited decarbonisation pathways.

Permitting questions

In addition to growing clean hydrogen demand and adoption, US policymakers in Congress and the White House are grappling with the longstanding questions around the permitting process for energy infrastructure.

The federal permitting process under the National Environmental Policy Act (NEPA) has hamstrung projects development for decades. No technology, from renewables to oil and natural gas, is immune to the broken NEPA process that is being used to stop all projects across the US. Anti-development forces have used litigation to delay projects, raise costs for developers and, in many cases, cause projects to be cancelled altogether.

Over the past two years, the current Congress has made incremental progress in addressing permitting reform through changes passed under the Fiscal Responsibility Act (FRA) of 2023.

However, most of the new changes that amended the NEPA process deal with how an administration structures its review process and not the underlying issues with litigation and extended timelines.
Since the FRA amendments were passed, Congress has introduced the bipartisan Energy Permitting Reform Act of 2024. While the bill has received mixed reviews, it establishes a postmark for an ‘all of the above’ approach for the next Congress to build upon and create a process that all energy infrastructure developers can rely upon.

Other major opportunities will arise in the next session to enhance federal support for clean hydrogen development, including reauthorisation for surface transportation programmes and tax legislation.

Industry and the bipartisan champions in Congress will need to continue the decades of steadfast support for clean hydrogen development policies, which will provide domestic clean energy job gains.

Both the US and the hydrogen industry are nearing their next inflection. We will soon have a new administration and Congress that have an opportunity to provide more certainty by addressing demand side and permitting challenges for clean hydrogen stakeholders. Attention and resources need to be refocused on the next stage of clean hydrogen development. While programmes and incentives like H2Hub and 45V are important to spurring development, the full potential of those programmes will not be realised without meeting tomorrow’s challenges.

Frank Wolak is president and CEO of the Fuel Cell and Hydrogen Energy Association

This article is taken from Outlook 2025, our annual publication examining the year ahead in energy. Subscribers can click here to read their free copy. The publication can also be bought from our store here.

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Author: Frank Wolak