On Tuesday, December 26th local time, Andy Marsh, President and CEO of Plug Power, stated that the eligibility criteria in the US hydrogen subsidy proposal were "disappointing", but he expects the final version of the restrictions to be much looser.
It is understood that Prague Energy, managed by Marsh, is the "number one hydrogen energy stock" in the United States and even globally. "We do believe that regulation is expected to relax a bit," Marsh told the media. He has communicated with many senators, who told him that "standards will become more relaxed, not stricter.".
Last Friday, the US Treasury Department released a 128 page proposal on the Federal Register website, which stated that US companies are expected to receive up to $3 in tax credits for every 1 kilogram of hydrogen produced. However, the electricity used in these hydrogen projects must come from newly built clean power projects in the past three years and must be located in the same grid area as hydrogen plants.
The proposal also states that hydrogen producers must prove every hour that the electricity used in their electrolysis cells comes from new renewable energy projects, meaning that the electrolysis cells can only operate within the same hour when clean electricity is available. The US Treasury Department has required hydrogen project companies to implement this plan starting from 2028, earlier than many companies and industry organizations had anticipated.
Fortunately, this proposal is still in the stage of soliciting public opinion, and these requirements may not appear in the final version of the bill. Marsh stated that the company's internal model shows that if written regulations are followed, hydrogen production in the United States will decrease by 70% by 2030. He added that Prague Energy and its peers are actively planning to help adjust government regulations.
Citigroup analyst Vikram Bagri wrote in the latest report that Prague Energy is building a green hydrogen plant in Georgia, and given the potential requirement for hourly proof, it remains to be debated whether the plant can receive tax credits, let alone a maximum subsidy of $3 per kilogram.
Previously, business groups including the American Chamber of Commerce criticized the new hydrogen subsidy rules, stating that they would slow down the construction of the hydrogen economy. Democratic Senator Manchin has also commented that for a government that wants to reduce emissions and address climate change, it is meaningless to suppress the hydrogen market before it even begins.
"These proposed regulations and requirements will unnecessarily hinder investment and technological development in the US hydrogen industry," said Frank Wolak, CEO of the Fuel Cell and Hydrogen Association (FCHEA) in a statement