(The Center Square) − President Trump’s “One Big Beautiful Bill Act” would terminate the Section 45V tax credit for clean hydrogen production beginning in 2026, potentially reshaping the economics of several major energy projects in Louisiana.

The legislation could eliminate billions in incentives for companies investing in low-carbon hydrogen and ammonia production.

CF Industries, one of the largest ammonia producers in the world with over 10 million tons of gross annual output, has a hydrogen production capacity of 1.7 million metric tons—half of which is generated in Louisiana.

Ryan Stiles, who manages the company’s ammonia production, confirmed that CF is currently utilizing the 45V credit, though he did not specify the amount claimed.

When asked whether customers were concerned about price increases if the credit is terminated, Stiles said the market response would vary. “It may take time for all end use cases to…want low carbon ammonia production,” he said, adding that some customers will be less tolerant of a price hike for the sake of a low-carbon product.

Air Products, which will operate a major hydrogen facility in Louisiana, reported receiving $19.7 million in federal tax credits in 2024. While it’s unclear how much of that stems from 45V, the company’s filings show that its federal tax credit claims rose by nearly 40% between 2020 and 2024.

The 45V program began in 2021, when President Joe Biden passed the Inflation Reduction Act.

Plug Power, which began operations in Louisiana last month, also flagged the importance of the 45V credit in its 2023 annual report, stating that any limitation “could be materially adverse to the Company and its near term hydrogen generation projects.” Both Plug and CF Industries noted that their investments in clean hydrogen predate the federal incentive.

Louisiana has emerged as a hub for hydrogen and ammonia-related projects. There are 46 currently planned energy products which have committed to emissions reductions, according to the Louisiana Economic Development.

Projects in the hydrogen production business include Air Products’ $4.5 billion blue hydrogen with 583 new jobs in Ascension Parish; Bia Energy Operating Company’s $550 million blue hydrogen project with 465 new jobs; Clean Hydrogen Works’ $7.5 billion blue hydrogen and ammonia project with 1,472 jobs; and Monarch Energy’s $426 million green hydrogen project, 149 jobs.

The potential financial impact of eliminating the 45V credit is unclear, but the loss of federal subsidies could pose significant challenges for these projects’ long-term viability.

Another provision in the bill would accelerate the sunset of the Section 48 Investment Tax Credit for certain technologies. Under the proposal, eligibility would end in 2032—three years earlier than current law—and the credit would decline from 6% for projects starting before 2030 to just 4.4% by the end of 2031.

Despite efforts to kill the 45V credit, the Trump administration has maintained support for Section 45Q, which provides tax credits for carbon capture and sequestration.

Energy companies have lobbied heavily to preserve 45Q, particularly in response to proposed restrictions on CCS by the Louisiana Legislature.

“We expect our investment into the Donaldsonville CCS project will increase our free cash flow in the range of $100 million per year due to the United States’ 45Q tax credit for permanently sequestering CO2,” CF Industries said in its annual report.

Under current law, companies cannot claim both 45V and 45Q. If the “big, beautiful bill” passes the Senate, energy producers will be left with only the carbon capture credit.