Summary of Texas Clean Hydrogen Development Bill (H.B. 5600)
Summary of Texas Clean Hydrogen Development Bill (H.B. 5600)
This bill aims to encourage the clean hydrogen industry in Texas by providing various supports such as tax benefits, loans, grants, and workforce training. Here’s a simple explanation of the main points:
What is Clean Hydrogen?
Clean hydrogen is hydrogen produced in ways that greatly reduce greenhouse gas emissions compared to regular hydrogen. This includes methods like:
- Using electricity from renewable or low-emission sources to split water (electrolysis)
- Producing hydrogen from natural gas but capturing and storing the carbon emissions
- Producing hydrogen using nuclear energy
- Any other federally approved low-carbon methods
Incentives and Support Offered
- Clean Hydrogen Development Fund: A special state fund will provide low-interest loans and grants to projects involved in producing, storing, transporting, or using clean hydrogen and related fuels. The fund will also support hydrogen equipment manufacturing and hydrogen trading systems.
- Priority for Startups and New Businesses: The program prioritizes new or relocating clean hydrogen businesses to Texas.
- Workforce Training Grants: Grants will be given to colleges and universities to develop training programs and courses that prepare workers for jobs in the clean hydrogen industry.
- Tax Exemptions and Credits:
- Hydrogen-powered vehicles will temporarily be exempt from certain state taxes until 2035.
- Businesses that manufacture hydrogen electrolyzers (key equipment to make clean hydrogen) and relocate to Texas are exempt from franchise tax for up to 10 years.
- Companies developing or operating clean hydrogen projects can get a tax credit equal to 20% of qualifying investments (up to their total tax due).
Additional Details
- The fund is managed by the state comptroller working with environmental and energy regulatory agencies.
- Applications for loans, grants, and tax credits will be reviewed based on things like job creation, emissions reductions, and innovation.
- The program aims to make Texas a leader in clean hydrogen technology and production.
- The bill takes effect starting September 1, 2025.
Why This Matters
Hydrogen is a key clean energy source that can help reduce pollution and fight climate change. This bill encourages businesses and schools in Texas to invest in hydrogen technologies, create new jobs, and build infrastructure that supports a cleaner energy future.