CNX Assets inventory tumbles on tax credit score considerations

Investing.com — Shares of CNX Assets Company (NYSE:CNX) dropped by 8% as buyers reacted to the corporate’s evaluation of the ultimate guidelines for the Part 45V Hydrogen Manufacturing Tax Credit score issued by the Treasury Division. CNX Assets expressed considerations postmarket on Friday that the brand new tax credit score guidelines don’t present sufficient incentive to advance its hydrogen undertaking, which entails using coal mine methane.

The corporate’s inventory skilled its most vital one-day decline since April 2020, plunging 11% on Friday. Analysts have been paying shut consideration to the implications of those tax credit score guidelines for CNX Assets. Piper Sandler analyst Mark Lear (NYSE:LEA) famous, “We suspect the corporate was relying on the IRS permitting further credit score for coal mine methane seize the place the language mentioned a baseline credit score assuming captured fuel could be flared.” Lear charges the corporate as underweight with a worth goal (PT) of $23.

In a current press launch, CNX Assets said that whereas the Division of Treasury’s acknowledgment of captured waste coal mine methane as a feedstock for hydrogen manufacturing is a constructive validation, the ultimate 45V guidelines are seen as overly restrictive. The corporate believes these guidelines don’t present sufficient financial incentives to develop its captured coal mine methane (CMM) operations for hydrogen use.

Regardless of the specifics of the 45V rule, CNX Assets plans to leverage the popularity of waste mine methane seize to discover different incentive avenues. These embody voluntary markets, different tax incentives, and compliance program business alternatives that acknowledge the seize of waste mine methane.

This setback comes as the corporate evaluates the financial viability of its undertaking in mild of the newly established pointers. CNX Assets is now tasked with discovering different methods to monetize its distinctive asset with out the anticipated stage of assist from the 45V tax credit score.

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