Shares of hydrogen producer and fuel cell manufacturer Plug-in power supply (NASDAQ: PLUG) rose 22.2% as of 1:45 PM ET on Monday. That extended Friday’s gains after the U.S. Treasury Department released final rules for the clean hydrogen production tax credit established by the Inflation Reduction Act (IRA).
Plug shares are rising on the news, as these rules appear to offer flexibility that could particularly benefit Plug Power with its various hydrogen activities. Plug shares are now up 41.5% in the first days of 2025.
Officials released the final rules after receiving feedback from industry players. The new rules give green hydrogen producers a more competitive way to advance their hydrogen projects.
The additional flexibility is also intended to give companies more clarity about further investments to stimulate the production and use of clean hydrogen. The new rules differ from the originally proposed rules by expanding the definition of new clean energy used to generate hydrogen. The aim is to ensure that electricity consumption for hydrogen production meets life-cycle emissions standards, while providing tax benefits where possible.
Plug Power could benefit because it has several hydrogen production facilities in the US, including a plant in Georgia that opened last year. The tax credits make hydrogen more competitive. But the company continues to lose money, and investors have shunned the stock over fears that the company could file for tax breaks that would provide much-needed financial benefits.
Plug Power shares are down about 25% over the past year, even after the recent surge. Investors should realize that while this is the news Plug Power wanted regarding the IRA tax benefits, it remains unclear what the incoming administration could change in the future. For that reason, it may still be best to avoid Plug Power stock and wait for more certainty in the coming year.
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