The hydrogen industry’s eager anticipation of the American market is met with a cloud of uncertainty, stirred by a leaked draft of Treasury Department rules regarding hydrogen tax credits under the Biden administration’s climate law.
This unexpected development has cast doubt on the sector’s trajectory, impacting key players like Nel and Plug Power. The situation is exacerbated by a recent downgrade from Morgan Stanley, further dampening market sentiment.
The hydrogen industry’s aspirations hinge on the American market, considered a pivotal player in fostering the sector’s sustained growth. However, recent revelations about the Treasury Department’s potential regulations have raised concerns about the industry’s ability to thrive under the proposed framework.
Tax credits are a linchpin for the hydrogen industry’s expansion, especially in the United States. The leaked draft of Treasury Department rules has sparked worries that the proposed tax credit framework might fall short of providing the necessary impetus for the sector’s exponential growth, according to reports from SeekingAlpha.
The repercussions of the leaked draft are immediately evident in the stock market, with Plug Power shares experiencing an 11.7 percent decline in US trading. This downturn is compounded by Morgan Stanley’s decision to downgrade Plug Power’s value to “Underweight,” accompanied by a reduced price target. Nel, a Norwegian competitor, also faces the brunt of the market turmoil, with its shares downgraded from “Overweight” to “Equal-Weight,” coupled with a substantial drop in the price target.
