Senate passes budget bill cutting 45V hydrogen tax credit eligibility to 2028

Republican Senators have narrowly passed President Donald Trump’s budget bill, which includes a measure to shorten the eligibility period for the lucrative 45V clean hydrogen production tax credit from 2033 to 2028.

The Senate approved the bill after Vice-President JD Vance cast the tie-breaking vote, following opposition from three Republican Senators.

The revised legislation sets the expiration of the 45V credit to 1 January 2028, allowing only projects that begin construction before the end of 2027 to qualify.

This marks a softening of earlier proposals that would have cut off eligibility as soon as 1 January 2026.

While the Senate-passed version gives developers two more years to act, it still significantly undercuts the original timeline laid out in the 2022 Inflation Reduction Act, which granted eligibility through to 2033.

Despite the rollback, hydrogen proponents welcomed the change.

Frank Wolak, President and CEO of the Fuel Cell and Hydrogen Energy Association (FCHEA), said the extension would give the industry an opportunity to advance a “significant round” of projects to kickstart the US market.

Wolak previously told H2 View that “very few” projects would have met the 2026 cut-off.

“Congress is poised to send a clear signal that the US is serious about competing in the global clean energy economy,” he said.

The Clean Hydrogen Future Coalition (CHFC) hailed the move a “major win” for US energy security, economic competitiveness, and global leadership.

“We are deeply grateful to the Senators who recognised hydrogen’s role in meeting President Trump’s energy dominance agenda and worked tirelessly to ensure this extension was secured in the final legislation,” said CHFC President Shannon Angielski.

The bill will now move to a reconciliation committee to align the Senate version with the bill passed by the House of Representatives in May.

It must pass both chambers before being signed into law by President Trump, who has pushed to finalise the legislation by 4 July.