Investing.com -- Plug Power (NASDAQ:PLUG) shares climbed 20% today, building on a 13% rise from Friday, following the Biden administration's decision to relax certain regulations surrounding a significant hydrogen production tax credit. The move is seen as a boost for companies in the hydrogen fuel sector, including Plug Power.
The Treasury Department's updated guidelines, released Friday, modify the stringent requirements initially proposed in draft form in December 2023. The revisions include a specific exemption that benefits some nuclear power plants and outlines eligibility for hydrogen produced from natural gas with carbon capture, methane, and renewable natural gas to receive the tax credit. This tax incentive, which can amount to as much as $3 per kilogram, is designed to encourage the growth of a domestic hydrogen industry, recognized as essential in reducing CO2 emissions across various heavy industries and transportation sectors.
The relaxed rules are a direct response to intense lobbying by industry players, with companies like Plug Power advocating for changes that would facilitate domestic manufacturing and the broader adoption of clean-burning fuel technologies. The updated policy is expected to have a substantial impact on the industry, easing the path for projects to qualify for the lucrative subsidy.
While the company's recent gains are directly tied to the updated tax credit rules, it's important to note that the stock movement also reflects broader investor confidence in the hydrogen fuel industry's potential to contribute to a cleaner energy future. The policy shift underscores the administration's commitment to supporting clean energy technologies and the companies that develop them, which could set the stage for further industry growth and investment.
As the market reacts to the policy update, investors and industry watchers will continue to monitor the implications for Plug Power and its peers in the evolving landscape of renewable energy and clean technology.
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