Clean hydrogen project determination factors

Hydrogen may be produced by distinct eligible pathways (such as electrolysis of water and the reforming of eligible hydrocarbons such as natural gas). The CRA will generally consider the operations for each eligible pathway to be a separate clean hydrogen project.

If the construction of eligible clean hydrogen properties occurs in phases, the CRA may consider a phase to be a separate clean hydrogen project.

For example, if a phase was not specified in the initial clean hydrogen project plan or such phase begins or is under construction after the first day of the compliance period of a different phase, this could indicate that such phase is a separate clean hydrogen project.

If particular eligible clean hydrogen properties start producing hydrogen before other eligible clean hydrogen properties start producing hydrogen, and there is no interdependence in the operation of such properties, this could indicate multiple clean hydrogen projects.

Where eligible clean hydrogen properties are owned by different owners, this could indicate that there are multiple clean hydrogen projects.

The existence of multiple distinct sites for different eligible clean hydrogen properties may suggest that there are multiple clean hydrogen projects. However, where there is physical or functional integration of infrastructure and equipment among multiple sites, it may be considered to be a single clean hydrogen project.

If an existing clean hydrogen project that has commenced commercial operations undergoes a significant expansion of its capacity, it could be considered to be a new clean hydrogen project.

For example, the addition of a new hydrogen production line could be considered to be a new clean hydrogen project.

If particular operations of a taxpayer (such as a production line) is physically or functionally integrated with other operations of the taxpayer (such as another production line), this could indicate that the operations are a single clean hydrogen project. On the other hand, if the two operations function independently, this could indicate that the operations are separate clean hydrogen projects.

Written agreements relating to clean hydrogen operations could aid in the determination of whether there is a single clean hydrogen project or multiple clean hydrogen projects.

Written agreements include:

• Partnership agreements
• Joint venture agreements
• Production sales contracts

Where applicable, the CRA may consider how you present and describe the project(s):

• In your financial statements
• In your other public documents
• To one or more regulatory and other government agencies, at all relevant levels of government