Accounting
America’s hydrogen-fueled future stalls over tax credits
Agnes Lopez/Bloomberg
Two years after President Joe Biden’s landmark climate law promised to kick-start green hydrogen production with generous tax credits, companies still don’t know who will qualify.
Billions of dollars in investments sit on the sidelines as a result.
The Biden administration sees green hydrogen as a critical component of the energy transition, a way to clean up heavy industries that can’t easily run on electricity. But the nascent hydrogen economy has been paralyzed waiting for final rules on a key tax credit, which will provide up to $3 for every kilogram of the fuel produced.
Hydrogen companies considered the initial guidelines issued by the Treasury Department late last year too strict and warned that many of their planned plants wouldn’t qualify for the full incentive. Developers have since been left in limbo as they await adjustments before the final rules are approved.
Hy Stor Energy, for example, plans to produce hydrogen in Mississippi using on-site wind and geothermal energy and be operational in 2027.
“Our project has multiple gigawatts of renewables and is holding off billions of dollars in investment,” said chief commercial officer Claire Behar. “That is just one project. If you multiply it by 10 to 20 projects, it’s a massive investment that’s being stalled.”
The delay isn’t simply a case of slow-moving bureaucracy. Industry and environmentalists have engaged in a months-long lobbying fight over the rules, with the federal government trying to strike a balance. But the lack of progress could impede the nation’s decarbonization efforts.
“People in the industry are very frustrated,” said Frank Wolak, chief executive officer of the Fuel Cell and Hydrogen Energy Association. “The longer people defer investments, the less committed they are.”
Almost all hydrogen produced today is stripped from natural gas in a process that gives off carbon dioxide. But there are cleaner ways to make the fuel, such as capturing the CO2 or splitting the hydrogen from water using renewable electricity. Those cleaner methods are the focus of the Inflation Reduction Act tax credit. The size of the credit available to each project rests on three so-called pillars: ensuring hydrogen is produced using new clean energy sources rather than existing ones, aligning hydrogen production with electricity generation times and adhering to stringent carbon intensity requirements.
Without strict rules on each, environmentalists argue, hydrogen production plants risk driving up greenhouse gas emissions rather than cutting them.
“The first draft in December was an excellent framework that will attract the truly green projects,” said Fred Krupp, president of the Environmental Defense Fund. “Whatever happens, it’s critical that Treasury uphold this framework and not add exemptions that would water down the emissions integrity.”
Companies counter they need looser rules, at least at first, to get the industry off the ground.
In addition to the tax credits, the federal government has set aside $8 billion to create a series of hydrogen hubs that would match producers of the fuel with customers using it. But leaders of the regional hubs are so worried about the current tax credit guidance that they sent the Treasury Department a
“Unfortunately, these investments and jobs will not fully materialize unless Treasury’s guidance is significantly revised,” they wrote.
The Treasury Department says it is carefully considering all the many comments it has received as it drafts the final rules, but officials haven’t given any timeline for finishing the work. “Finalizing rules that will help scale the clean hydrogen industry while implementing the environmental safeguards established in the law remains a top priority for Treasury,” a department spokesperson said in an email.
Finding the right balance has been hard. John Podesta, Biden’s senior adviser for international climate policy, called the IRA’s hydrogen incentives “the most complex of the credits, technically and legally” at an event this week celebrating the second anniversary of the law’s passage. He acknowledged the mixed reaction the government’s preliminary guidelines received. “Some people loved it,” Podesta said. “Some people didn’t.”
Even if new guidelines are published now, companies might wait until after the election to see if they need to comply with them, according to Martin Tengler, an analyst at BloombergNEF. Donald Trump has promised to target the IRA if he retakes the White House in November, but his attitude toward hydrogen is unclear.
Policy uncertainty is not confined to the US. German company Thyssenkrupp Nucera in
“Progress on the regulatory side is recognizable, but at the same time not yet sufficient to accelerate investment momentum again,” Thyssenkrupp Chief Executive Officer Werner Ponikwar said in a statement. “The result is further delays to new projects on the customer side.”
Rival Siemens Energy AG has invested €30 million to produce electrolyzer stacks in Berlin together with industrial gas company Air Liquide.
“In the short term, we do observe delays in the release of funding commitments due to regulatory uncertainties, for example in the US and in Europe,” Chief Financial Officer Maria Ferraro said in an analyst call in May. Long-term prospects for the business, however, remain intact, she added.
Some in the industry expect the Treasury Department to soften its rules — although that hasn’t happened yet. Andy Marsh, CEO of Plug Power Inc., said he expects new guidance soon.
“We won’t be surprised if there’s some announcement after the Democratic convention and a further announcement after the election,” he said during the company’s earnings call last week. “I think it’s really clear that the regulations on the three pillars are going to become much looser.”
Carbon-free green hydrogen remains far more expensive than hydrogen from natural gas, and until that changes, companies have little incentive to start using it as a fuel. But costs won’t come down until the wave of planned green hydrogen plants start opening, Tengler said. And they won’t move forward until the federal government finalizes its tax rules.
“The only way green hydrogen becomes cheaper is by building projects, but with these early projects stalled, the industry is being choked before it’s even born,” Tengler said.
Citrin Cooperman announced today it will receive a significant investment from Blackstone, the world’s largest private equity firm, which will acquire a majority stake in the firm from New Mountain Capital.
The deal is the first instance of an accounting firm to transfer private equity ownership from one group to another in the U.S. Terms of the transaction were not disclosed.
“We are excited to have reached an agreement for Blackstone to invest in Citrin Cooperman as we enter our next chapter of growth,” Citrin Cooperman CEO Alan Badey said in a statement Tuesday. “Blackstone will help us make additional investments in expanded service offerings and technology as we deliver on our continued commitment to best-in-class firm culture and providing an exceptional client experience. We thank New Mountain for their years of partnership in helping to build and support our business.”
Allan Koltin, CEO of Koltin Consulting Group, who advised on the deal, commented: “For many in the profession, the biggest question was whether something like this could ever happen, and my belief is there will now be many other transactions like this in the future. Kudos to Citrin Cooperman, New Mountain Capital and Blackstone on making history today.”
New Mountain first
“We are proud of our successful partnership with Citrin Cooperman, and we thank the management team, partners and staff of Citrin Cooperman for all we have accomplished together over the last three years,” Andre Moura and Nikhil Devulapalli, managing directors at New Mountain, said in a statement. “We look forward to seeing Citrin Cooperman continue to thrive for the benefit of all its clients and stakeholders.”
“The Citrin Cooperman partners and staff have done an exceptional job making the firm a leader through an unwavering commitment to excellence and client service,” Eli Nagler, a senior managing director at Blackstone, and Kelly Wannop, a managing director at Blackstone, said in a statement. “We are excited to invest in the business to help it continue to provide the highest quality offerings moving forward.”
Deutsche Bank Securities is serving as financial advisor, and Kirkland & Ellis and Gibson, Dunn & Crutcher are serving as legal advisors to Blackstone. Guggenheim Securities is serving as lead financial advisor to New Mountain and Citrin Cooperman. Koltin Consulting Group is serving as an additional financial adviser to both parties. Simpson Thacher & Bartlett, Zukerman Gore Brandeis & Crossman and Hunton Andrews Kurth are serving as legal advisers to New Mountain and Citrin Cooperman.
“Accounting is the best place to start because it’s the purest form of finance,” wrote Robert Kiyosaki, author of the Rich Man Poor Dad series of personal finance books. “You can’t fool it; it’s empirical.”
This insight resonates deeply in today’s business environment, where organizations must navigate macroeconomic uncertainties, technological disruptions and transformational opportunities. Amid these buffeting currents, finance and accounting have evolved from a number-crunching function to a strategic and consultative one, playing three critical roles — safeguarding assets, streamlining operations and influencing future growth. As we move into 2025, five key trends will define the F&A landscape and its ability to drive strategic value.
Johnson, who has been in her position for six-and-a-half years, said on
“The past 6.5 years have been nothing short of transformative. I am deeply grateful to have been part of such a visionary organization that consistently pushes the boundaries of innovation in the accounting & finance profession,” she said in her post.
In an email she said that the timing was right for her to pursue other interests she is passionate about. However, while she is stepping away from her position, she plans to stay involved and collaborate with the AICPA and CPA.com on strategic initiatives. When asked about specifics in an email, Johnson said she will still be very involved in the AICPA/CPA.com Startup Accelerator program (which she said was the most rewarding part of working at CPA.com) and serve as an overall strategic advisor to the organization working on key initiatives like the AI Symposium and Digital CPA.
In her goodbye message on LinkedIn, she thanked the AICPA leadership for helping her grow as a professional, and gave particular thanks to her research team, saying they are the true embodiment of change makers.
Regarding her immediate plans, Johnson told Accounting Today she plans to take a few months to reset and invest in some personal development interests. She added that she also completed her NACD Corporate Director certification and has been accepted to the Harvard Business School’s Executive Program on Private Equity and Venture Capitalism for the first quarter of 2025.
When asked about what her proudest achievement was during her tenure, she pointed to the AICPA Town Hall.
“I’m most proud of being part of the team that developed and produced the AICPA Town Hall. It’s inception was at the beginning of COVID; so many practitioners needed guidance on how to support clients and navigate all of the uncertainty. To see what the Series has grown into is nothing short of incredible,” she told Accounting Today.
Johnson joined CPA.com in 2018 as a strategic advisor before, in 2021, becoming senior director of strategy and innovation and then, in 2022, vice president of strategy and innovation. Prior to her joining CPA.com, she was the founder of accounting-focused tech consultancy firm Blue Ocean.
Accounting Today named Johnson a “
Among other accomplishments, she was a major force behind CPA.com’s
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