US Tax Changes Give Blue Hydrogen Unexpected Boost
Washington, Tuesday, 15 July 2025.
With the rollback of the 45V tax credit, blue hydrogen gains a surprising edge in the US. The new tax incentives shift industry focus from green to blue hydrogen, creating investment waves.
Introduction
It’s a time of change for the hydrogen sector in the US. Blue hydrogen projects are poised to thrive amidst the revised tax landscape, making a splash with the recent policy shifts. The rollback of the 45V clean hydrogen tax credit, specifically, has tipped the scales significantly in favour of blue hydrogen, which now seems to have struck a sweet spot in the investment community [1].
Surge in Blue Hydrogen Projects
Thanks to the ‘One Big, Beautiful Bill’ passed recently, which amended the timeframe for clean energy incentives, blue hydrogen has gained substantial traction [1]. The deadline for the 45V tax credits was moved up to December 2027 from 2032, creating urgency and opportunity. Simultaneously, the 45Q carbon capture credit climbed to $85 per tonne of CO₂, sweetening the pot for carbon capture-enabled production [1]. No wonder Linde is eyeing around 90% of its US projects to utilise such credits [1].
Shift in Investment Strategies
Companies are now realigning their strategies, like Chevron’s $5 billion effort in its Texas-based Labrador project, eyeing a start before the tax credits run dry [2]. As the federal budget reconciliation mandates constructions to start by 2027, it’s a race against time and a race well worth watching [2].
Blue Hydrogen vs Green Hydrogen
While this shift might make you question green hydrogen’s future, it hasn’t lost its long-term lustre, though blue hydrogen seems bankable and ready for action now [1]. It’s a bit like having a reliable umbrella for immediate rain and a stylish rooftop soon after. However, analysts warn of potential misalignment of current projects with the revised tax incentives [5].
Looking Forward
This evolving landscape truly raises questions about the sustainability and future of hydrogen production as a whole. Will green hydrogen projects regain the upper hand, or will blue hydrogen become the cornerstone of future energy solutions? Only time—and perhaps a few clever policy shifts—will tell [1][2].