Senate softens 45V hydrogen credit rollback, extending its eligibility through 2027

The US Senate unexpectedly extends 45V clean hydrogen tax credit eligibility by two years to the end of 2027. The extension, part of Trump’s controversial budget bill, provides crucial support for clean hydrogen projects.

In an unexpected development, the US Senate has revised the Trump administration’s contentious budget bill to extend the eligibility window for the 45V hydrogen production tax credits. The updated draft from the Senate Budget Committee pushes the construction start deadline from January 1, 2026, to December 31, 2027, granting developers two additional years to qualify for the incentive, which offers up to $3 per kilogram.

Previously, versions passed by the House of Representatives and circulated by the Senate Finance Committee aimed to sunset these credits significantly earlier, setting a January 2026 cut-off. This new adjustment could revive numerous hydrogen projects that faced cancellation under the original, tighter timeline.

The revision emerged during Senate deliberations on President Donald Trump’s hallmark legislation, the One Big Beautiful Bill Act. Initially, developers had until the end of 2025 to initiate projects to benefit from these lucrative tax credits. The new extension until January 2028 offers a significant boost, potentially stabilizing investment and planning within the hydrogen sector.

The tax credit is a key tool for decarbonizing heavy industry and transport through green hydrogen, and extending it aligns the U.S. timeline more closely with European subsidy frameworks. The move is widely seen as a rare show of bipartisan pragmatism under the Trump administration’s second term, stabilizing a critical climate incentive without expanding its total cost. Hydrogen developers now have until the end of 2027 to begin construction and claim the full benefit.