Hydrogen ITC Requirements

Canada's Clean Hydrogen ITC provides credits of 15% to 40% based on the carbon intensity of the hydrogen production pathway. This guide covers eligibility thresholds, qualifying pathways, and compliance obligations.

Credit Rates by Carbon Intensity

40% credit — hydrogen with lifecycle emissions below 0.75 kg CO2e per kg H2
25% credit — hydrogen with emissions of 0.75 to 2 kg CO2e per kg H2
15% credit — hydrogen with emissions of 2 to 4 kg CO2e per kg H2

Eligible Production Pathways

Electrolysis powered by clean electricity (green hydrogen)
Steam methane reforming (SMR) with carbon capture (blue hydrogen)
Biomass gasification with carbon capture

Lifecycle Assessment Requirement

Projects must conduct a lifecycle carbon intensity assessment using the Fuel Life Cycle Assessment (FLCA) model or an equivalent methodology accepted by Natural Resources Canada. The assessment must be verified by a third-party engineer.

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