Under pressure to remove billions of dollars from the annual budget, the Obama administration has released a plan that ends funding for the U.S. Environmental Protection Agency's clean-diesel grants and the Energy Department's hydrogen fuel-cell program. Electric transportation, on the other hand, is seen to benefit with a move to turn the current $7,500 tax credit into a point of purchase rebate.

The proposed 2012 budget also plans to steer funds away from traditional energy company tax breaks into funding to help reach the goal of one million plug-in cars by 2015 in coordination with the effort to double the amount of energy generated from "clean" sources by 2035.

As you might expect, the Fuel Cell and Hydrogen Energy Association is not happy with the move and has already issued a statement asking Congress to reopen the cash sluice gate. Last year's fuel cell spending allotment at the Energy Department was $49 million.

The decision to axe the clean-diesel program might be seen as more controversial since its effects were more short-term. That effort saw older diesel buses, trucks and construction vehicles retro-fitted to clean up their emissions. It had $80 million budgeted last year and had just been authorized to receive an additional $500 million over the next five years.

We're pretty sure not everyone will be pleased by this all-eggs-in-one-basket approach, but the proposal still has to go through Congress and could possibly change. We're also just as sure not everyone will agree with any changes at all...

[Source: Automotive News – sub. req.]

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