A new rule from the US Treasury Department on clean hydrogen production tax credits has sparked a surge in shares of energy stocks, including nuclear and renewable power companies. The rules, published Friday, clarify guidelines for producers to qualify for the tax credit, which can be worth up to $3 per kilogram of produced hydrogen.
The move has given companies a much-needed boost, as many were hesitant to invest in hydrogen production projects until the rules were clear. Plug Power, a supplier of hydrogen fuel cells and electrolyzers, saw its stock soar 13% on Friday, while Constellation Energy, a nuclear power company, climbed 4% higher.
The tax credit is part of the Inflation Reduction Act signed by President Biden in 2022, and aims to incentivize companies to scale up clean hydrogen infrastructure. The new rules also allow natural gas producers to qualify for the credit, which could unlock billions of dollars worth of funding.
Nuclear power company Oklo jumped nearly 25% on Friday, while Nano Nuclear Energy and NuScale Power, both developers of small modular reactors, saw their shares rise by around 13% and 18%, respectively. The news has also lifted hopes for the future of nuclear energy, which has been struggling to compete with renewable sources in the climate debate.
With the new rules in place, companies are now more confident to invest in hydrogen production projects, and the stock market is benefiting from the increased optimism.
Source: https://www.investors.com/news/hydrogen-tax-credit-sp-500-constellation-energy-amazon-vendor-soar