Hydrogen Subsidy Worth Billions Includes Strict Green Rules (1)

Billions of dollars in hydrogen-industry subsidies from President Joe Biden’s signature climate law will come with stringent environmental safeguards, raising concerns that strict rules will stifle production of the nascent climate-friendly fuel.

Under the proposed rules laid out Friday, the new clean-hydrogen tax credit won’t benefit existing nuclear power plants, which is a blow to reactor owners such as Constellation Energy Corp. that lobbied for inclusion. Administration officials, however, said that could change when the guidelines are finalized.

The hydrogen credit, which provides as much as $3-per-kilogram of production, is meant to spur a domestic industry for the clean-burning ...