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Plug Energy (NASDAQ:PLUG) closed -11.6% and FuelCell Vitality (FCEL) -7.9% in Tuesday’s buying and selling after a leaked draft of Treasury Division guidelines for hydrogen tax credit within the Biden administration’s local weather legislation prompted warnings that the necessities may severely hamper the young industry.
The principles, which haven’t been finalized, embody measures sought by environmentalists that might require hydrogen manufacturing operations to be powered by wind, photo voltaic or different clear energy tasks constructed inside the final three years to qualify for a $3/kg credit score, Bloomberg reported.
DoT steerage reportedly additionally says hydrogen tasks ought to be provided with new, clear energy sources working on the identical grid on an annual foundation by means of 2027, then on an hourly foundation beginning in 2028.
“If true, the Biden Administration’s proposed technique for implementing these provisions will fail to get this new business off the bottom,” the American Clear Energy Affiliation mentioned.
Hydrogen is taken into account a essential gasoline for decarbonizing metal, cement and different heavy industries, and the tax credit score is seen as a necessary incentive to encourage its growth, however environmentalists say strict guidelines and wanted to require hydrogen to be produced with new clear energy sources working on the identical grid and through the identical time, or it might drive additional demand for fossil fuel-based electrical energy.