CNX Clarifies Its Position on New Hydrogen Production Tax Credit Rules

CNX Resources Takes a Stand on Hydrogen Production Tax Credit

On January 3, 2025, CNX Resources Corporation, located in Pittsburgh, made headlines by issuing an official statement concerning the final regulations associated with Section 45V of the Inflation Reduction Act. This key legislation introduced incentives aimed at promoting hydrogen production, particularly from low-carbon sources. However, CNX’s statement reflects apprehensions regarding the new guidelines and their implications for natural gas and coal mining industries.

The company expressed its approval of the Department of Treasury's decision to recognize captured waste coal mine methane (CMM) as a viable feedstock for hydrogen production. This acknowledgment is seen as a significant endorsement of the environmental and economic advantages that CMM presents. CNX firmly believes that this validation is crucial not only for their operations but also for the broader energy transition.

However, the excitement surrounding the guidelines is somewhat tempered by concerns regarding the strictness of the implementation rules. CNX contends that these regulations may be too restrictive, limiting the potential for other feedstocks and ultimately hindering their plans to scale up CMM capture operations designated for hydrogen applications. The firm has signaled that these regulations do not appear to offer adequate economic incentives to motivate an expansion of their existing capabilities in CMM capture,

A spokesperson for CNX stated, "While we appreciate the Department of Treasury’s recognition of CMM, it is crucial that the guidelines be amended to better align with market realities and provide strong economic drivers for the expansion of CMM initiatives.” The company plans to leverage the validation derived from this new development as they explore alternative avenues for monetizing CMM volumes. This includes pursuing voluntary markets, exploring other tax incentives, and identifying commercial opportunities that acknowledge the importance of waste mine methane capture.

About CNX Resources Corporation

CNX Resources (NYSE: CNX) prides itself on being an innovative leader in the natural gas sector, focusing on ultra-low carbon operations within Appalachia. With a storied legacy spanning over 160 years, CNX boasts substantial natural gas reserves, amounting to approximately 8.74 trillion cubic feet equivalent as of December 31, 2023. The company's strategy emphasizes responsible resource development, technological innovation, and robust capital allocation to drive long-term shareholder value.

As a member of the Standard & Poor's Midcap 400 Index, CNX is committed to sustainable practices and draws considerable strength from its rich heritage and technical know-how. The organization is poised to confront the challenges of the energy market, adapting its strategies to align with evolving regulations and market demands.

In the wake of these developments, CNX Resources is also cautious regarding future market conditions and the inherent risks linked to forward-looking statements in their communications. Potential investors are thereby reminded to assess the uncertainties tied to the energy sector, which include price volatility, regulatory changes, and unpredictable economic landscapes.

Overall, while the final implementation rules surrounding hydrogen production present certain limitations, CNX Resources is committed to navigating its operations with a forward-thinking approach to capitalize on emerging markets, ensuring that it remains at the forefront of the energy transition narrative.