Surprise extension for green hydrogen credits

Green fuel production credits extended to 2029

Carbon capture credits left almost untouched

IMAGE: US President Donald Trump. Flickr of Trump White House Archives

“History made,” the White House said as US President Donald Trump’s pet project, the One Big, Beautiful Bill cleared both the House and Senate.

The bill brings key changes from earlier drafts and offers fresh relief to e-fuel producers.

E-fuels such as e-methane and e-methanol are produced by combining green hydrogen generated from renewable electricity with biogenic or captured CO2.

These fuels come at price premiums to conventional marine fuels because of the high costs of green hydrogen production, carbon capture and other operations.

The US Inflation Reduction Act (IRA) aimed to offset some of these costs by offering tax credits to green fuel producers.

While Trump’s earlier pushback against the Inflation Reduction Act (IRA) and the Senate Finance Committee’s proposals cast uncertainty over green tax credits, the final bill has approved some unexpected measures that provide relief to fuel producers, including bunker fuel suppliers.

The 45V clean hydrogen production credit has been extended for two years, now ending in 2027 instead of 2025 as proposed in the Senate’s earlier draft.

The 45Z credit for clean fuel production is now extended through 2029 instead of 2027 in the official version. The previous House and Senate texts had proposed extending the bill to 2031.

“Fuel produced after December 31, 2025, would be required to be exclusively derived from feedstock produced or grown in the United States, Mexico, or Canada,” US-based law firm White & Case (W&C) explains.

“Transportation fuel emissions rates published after Dec. 31, 2025, could not be less than zero,” W&C added.

The Congress has also softened the blow for renewable energy producers, with the bill now allowing wind and solar projects in operation by the end of 2027 to qualify for full credits under 48E.

The 45Q credit for carbon capture and storage (CCS) will retain almost all of its original appeal. Taxpayers will receive $17–36/mt in base credits for projects starting between 2025-2026. These credits will be adjusted for inflation after 2026, according to W&C.

The bill will now be sent for presidential approval before it can officially become law.

By Konica Bhatt

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