CRA finds that the electrolysis of sodium chloride solution producing hydrogen only as a by-product did not qualify as the “electrolysis of water” for clean hydrogen purposes

Whether a project, which used the chlor-alkali process or the chlorate process, constituted a qualified clean hydrogen project depended on whether, in accordance with the “eligible pathway” definition, such processes produced hydrogen from “electrolysis of water.”

CRA concluded that neither process so qualified given inter alia that these processes used electrolysis of sodium chloride solution to generate primarily sodium hydroxide or chlorate compounds, and the hydrogen produced was a relatively minor by-product.

Neal Armstrong. Summaries of 26 May 2025 External T.I. 2025-1056481E5 under s. 127.48(1) – eligible pathway and Statutory Interpretation – ordinary meaning.