What happened

Shares of hydrogen fuel cell maker Plug Power (NASDAQ:PLUG) have been on a tear in 2021. After several new business announcements, the stock has gained more than 90% just since the start of the new year.

Today, shares were more than 10% higher before settling back to a gain of 8% as of 11:45 a.m. EST. Today's move may be from a more general sector announcement from the U.S. Department of Energy (DOE). 

So what

Last Friday, the DOE announced it was allocating $160 million in federal funding "aimed to develop technologies for the production, transport, storage, and utilization of fossil-based hydrogen."

dice spelling out H2 fuel flipping from fossil fuel

Image source: Getty Images.

Now what

The funding is intended to "recalibrate" the country's fossil fuel infrastructure toward renewable energy and net-zero carbon emissions, the statement said. Some of the specific objectives of the funding include electrolysis technology, hydrogen pipeline infrastructure, and subsurface hydrogen storage. 

The DOE intention to transition the fossil fuel-based hydrogen industry to net-zero emissions wouldn't directly benefit Plug Power's green hydrogen technology. But growth in hydrogen fueling infrastructure and the technology in general should help grow the entire sector. 

Plug has recently also announced deals with South Korea's SK Group and French automotive company Renault (OTC:RNSDF) that have helped boost shares. While this is all potentially good long-term news, investors should be aware that the company's valuation has grown significantly just in the last several weeks, and should portion any investment accordingly.

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