Hydrogen Energy’s Crossroads: The Impact of U.S. Policy Changes Under New Leadership
In recent years, hydrogen (H2) as an alternative fuel source has seen historic support in North America and abroad.
The FASTECH Energy Solutions Blog has reported consistent advancements in the U.S. hydrogen economy, such as:
- The U.S. Treasury’s finalization of hydrogen production (45V) tax credits
- Avina’s plans to invest $820 million in an Illinois clean hydrogen facility
- California’s $1.4 billion investment plan for electric and hydrogen vehicle infrastructure
However, the 2024 election win for the Trump-Vance administration marked a sharp change in direction for federal energy initiatives. On Inauguration Day, the new administration revoked and rolled back many Biden-era policies that supported clean energy or regulated fossil fuels.
The sweeping changes shook the confidence of many clean energy and climate advocates, but others remain optimistic for the future. The question remains: how will the change in leadership affect the hydrogen industry’s upward trajectory?
Why H2 Matters: A Brief Recap
Though hydrogen gets much less time in the limelight than other renewable energy sources, experts expect it to play a key role in creating a carbon-neutral future.
As the most abundant element in the universe, hydrogen is everywhere all the time and can be collected and refined anywhere with the proper equipment. This feature is essential to complement the intermittent nature of wind and solar power.
Hydrogen-powered vehicles and machinery also have major advantages over electric vehicles (EVs), including:
- Longer ranges
- Faster refuel times
- Better energy storage efficiency
As a powerhouse fuel source that can be stored for long periods with less energy loss than electric batteries, hydrogen is vital for filling gaps in the clean energy economy. Its natural properties even make it a strong contender for power grid stabilization.
What’s at Stake for Hydrogen? According to Experts: Everything
Historically, hydrogen has been slow to gain widespread adoption due to technological limitations. Only recent advancements in hydrogen production and fuel cell stacks have made the alternative energy financially feasible.
The Biden-Harris administration prioritized clean energy and climate policy throughout its term. In 2021, Biden signed the bipartisan Infrastructure Investment and Jobs Act, which dedicated $9.5 billion to expanding clean hydrogen production and improving the fuel’s affordability.
The Inflation Reduction Act (IRA) of 2022 dedicated even more the following year, described as “the single largest investment in climate and energy in American history…”
The act provided groundbreaking wins for the hydrogen industry and broader clean energy market. In addition to creating the above-mentioned Section 45V hydrogen tax credit, the IRA:
- Formed a $5 billion Energy Infrastructure Reinvestment (EIR) Program designed to repurpose unused energy infrastructure, and upgrade facilities to mitigate greenhouse gas (GHG) emissions.
- Expanded lending authority for clean energy programs established in the Energy Policy Act of 2005 by over $40 billion.
- Expanded and extended the Advanced Technology Vehicles Manufacturing (ATVM) Direct Loan Program.
The surge of funding effectively spurred nationwide investments in clean energy infrastructure.
New hydrogen hubs opened, expanding production and distribution. Hydrogen refueling infrastructure growth accelerated. Even heavy-duty transport sectors discovered hydrogen alternatives on par with the cost and performance of fossil fuels.
Simply put, clean hydrogen gained unprecedented federal support during the Biden administration. When the time came to pass the torch to Trump—a staunch critic of climate advocacy and clean energy—the market waited in suspense to see what would change.
The Policy Shift: A Less Friendly Environment for Clean Energy
The second Trump administration has so far been characterized by considerable changes to the federal government as a whole, especially regarding climate policy.
Trump criticized Biden-era climate and energy regulations in Agenda47—the framework for his second term—stating, “Joe Biden has surrendered to Communist China and the crazed climate crusaders,” framing the policies as “Biden's War on American Energy.”
More broadly, Trump has referred to renewable energy initiatives as “the Green New Hoax” and frequently expressed opposition to the idea of human-made climate change.
As green energy advocates had feared, the new administration wasted no time undoing many of its predecessor's efforts.
So far, the second Trump administration has:
- Indefinitely frozen “...funds appropriated through the Inflation Reduction Act… or the Infrastructure Investment and Jobs Act…”
- Withdrawn offshore leasing agreements for wind power projects while leaving the option open for oil and gas drilling.
- Issued an executive order to block state laws that address climate change, environmental justice, or carbon emissions (shortly after another order to bolster coal production.)
Given the sheer volume of changes through executive orders and cutbacks through the Department of Government Efficiency, or DOGE, it would take a textbook to cover them comprehensively (especially since the administration shows no signs of slowing).
If one thing is clear, it’s that federal funding for clean energy projects is in flux. However, some are arguing that hydrogen may have more protection from cutbacks than other renewables.
How Red States Could Save the Hydrogen Economy
Though the Trump administration’s pause or rollback of Biden-era policies has the clean energy industry in suspense, many argue that a complete elimination of hydrogen funding remains unlikely.
For one thing, the overwhelming majority of new and current hydrogen developments are in red states, where President Trump receives the bulk of his support.
Energy news blog Power Technology points out, “the highest levels of [hydrogen] project activity and most active development of hydrogen production capacity are taking place in Republican strongholds such as Texas, Louisiana and West Virginia – regions that stand to benefit significantly from continued federal incentives.”
Though the Trump administration has shown keenness for slash-and-burn budget cuts, pulling funding for projects with economic benefits for close allies may not be strategically beneficial. Especially during a time when Trump faces internal opposition from his party and voter base, he may not be so eager to rescind funding going toward Republicans.
Trump has also voiced support for carbon capture and storage (CCS)—a technology widely used in blue hydrogen production—although in the context of fossil fuels. Even fossil fuel giants like Exxon and Dow Chemical have begun widespread investments in hydrogen energy.
While green hydrogen—made from renewable energy—is unlikely to see much support, other forms like blue or pink hydrogen may still win favor with the president.
Will all these factors combined be enough to save hydrogen funding from Trump’s purge of Biden policies? No one can say for certain, nor how long it will take to find out.
What is known is that the demand for clean energy is at a global high and will continue with or without government support.
Navigating Economic Uncertainty: Next Steps for Hydrogen Investors
Those considering investing in hydrogen energy (or who already have) may understandably feel hesitant about the fuel’s future.
However, it’s worth noting that the renewable energy industry is currently set to provide over 93% of the nation’s new energy in 2025. In terms of energy independence, solar and wind are among the leading providers of new power sources across the country.
So, what can investors do?
Those who were planning to use federal programs to complete a hydrogen project should consider diversifying their funding sources. Though the federal funding freeze is titled as “temporary,” there is also no set end date. The order is in place until the president cancels it.
Check if your state government offers any incentives for hydrogen, clean energy, or alternative fueling. Programs vary widely by state, but you may find support from your local government while waiting for the federal level to clarify funding moving forward.
Investors should also choose an engineering, procurement, construction, and maintenance (EPC+M) provider with experience adapting to changes in policy and funding conditions. Such service providers should be able to offer compliance and testing in-house to ensure complete adherence to state and federal regulations.
Keeping projects under one roof minimizes costs and delivers the fastest results.
FASTECH: Supporting Hydrogen Projects no Matter the Political Landscape
As the leading developer of hydrogen energy infrastructure, FASTECH has a vested interest in seeing the alternative fuel industry flourish.
The FASTECH team has:
- developed over 40 hydrogen fueling stations
- over 30 years of experience in energy infrastructure EPC+M
- collaborated with top industry leaders—like Shell, Chevron, and Hyundai—to develop alternative fueling infrastructure
FASTECH’s experts have the end-to-end expertise to power your project from planning all the way to preventative maintenance.
Find affordable hydrogen energy solutions within your budget.
