OPINION:
Is the United States ready to hand another strategic industry to China? Clean hydrogen may be the most consequential industrial technology since semiconductors, and right now, amid a great-power economic confrontation, China is racing ahead.
The U.S. still leads in hydrogen innovation and private-sector investment, but that edge is fragile. Congress must preserve the 45V clean hydrogen production tax credit to ensure this critical industry remains American-made.
Hydrogen is a crucial chemical ingredient in making ammonia fertilizer, which is essential to growing our food. It is used to refine petrochemical fuels such as gasoline. It can be burned to provide high-temperature industrial heat for making steel and cement or converted into fuel for aviation or shipping.
Clean hydrogen is produced using renewable electricity, such as wind or solar, to split water into hydrogen and oxygen using an electrolyzer. It emits virtually no carbon, unlike “gray” hydrogen made from natural gas, which accounts for more than 95% of the market.
The International Energy Agency said nearly 70% of all new electrolyzer capacity in 2024 was Chinese-made, a trend that continues this year. State-owned giants such as Sinopec are building massive clean hydrogen plants and pipeline networks to supply industrial users and compete in export markets.
We have seen what happens when the U.S. underestimates the importance of strategic technologies. America once dominated rare earth mineral production. Today, China controls more than 85% of global rare earth processing.
A similar story has unfolded in solar panels, batteries and semiconductors. China invested deliberately in these sectors while the U.S. hesitated. Current efforts to onshore manufacturing are laudable but will take years.
Hydrogen can be different, but only if Congress stays the course.
Thanks to policies enacted with bipartisan support, the U.S. is finally in a position to lead. The clean hydrogen production incentive, known as 45V for a section of the tax code, has catalyzed more than $38 billion in private investment in less than three years.
American companies are building electrolyzer factories across the country. Hydrogen “hubs” in the mid-Atlantic, Appalachia, California, the Gulf Coast, Midwest, Pacific Northwest and heartland regions will put the resulting hydrogen to work.
The private sector leads this surge of activity. The 45V incentive rewards hydrogen producers based on performance, providing a tax credit per kilogram of hydrogen produced, scaled to how low their emissions are. This market-based incentive is designed to reward output, not speculation.
It’s also technology-neutral. “Blue” hydrogen made from natural gas with carbon capture benefits from the same incentives as “green” hydrogen. The incentive depends on carbon intensity and doesn’t pick a pathway to get there.
This approach is working. Hydrogen is now one of the fastest-growing segments of the U.S. energy economy, with projects advancing in more than 20 states. Companies are laying the groundwork for investment across the value chain, including equipment manufacturing, distribution infrastructure and end uses such as aviation fuels and clean steel. The Department of Energy projects that the regional hydrogen hubs program will support tens of thousands of new jobs, including roughly 45,000 from the Gulf Coast hub alone.
However, this progress could stall if Congress passes the current proposal to terminate the 45V tax credit for projects starting construction after 2025, effectively repealing the incentive. The United States would jeopardize projects already underway, strand billions of dollars in private capital and surrender American leadership in a vital technology sector.
As the tariffs debate has brought into stark relief, global markets already feature foreign subsidies and industrial policies. The European Union backs hydrogen deployment with billions of dollars in capital grants and subsidized financing, including through its new European Hydrogen Bank, creating a market for American electrolyzer manufacturers.
China leverages its state-owned enterprises and cheap capital to dominate hydrogen manufacturing and deployment.
The United States has chosen a different path that leverages our private-sector ingenuity and abundant domestic energy resources. This approach has made the U.S. one of the most attractive places in the world to invest in clean hydrogen. Still, our success depends on one thing: policy stability.
In March, 21 House Republicans urged congressional leaders to preserve such clean tech incentives. Twelve signed a follow-up letter in early May. These lawmakers, many representing districts that benefit directly from hydrogen projects, argued that a premature rollback would undercut U.S. energy security and job creation. They’re right.
Clean hydrogen is an industrial strategy. It gives U.S. steelmakers, chemical producers, freight carriers and fuel refiners a competitive edge they need to stay ahead in a global market that continues to move rapidly toward low-carbon technologies and products. We can sell to this market.
Republican lawmakers have long championed energy independence, manufacturing growth and global competitiveness. Continuing to back hydrogen is a chance to deliver on all three while ensuring America, not China, shapes the energy economy of the future.
• Jacob Susman is the CEO of Ambient Fuels, a leading American developer of clean hydrogen projects for industrial decarbonization. He has more than 20 years of experience building and leading companies at the intersection of energy, infrastructure and innovation.
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