Words and Phrases - "electrolysis of water"
26 May 2025 External T.I. 2025-1056481E5 - Clean Hydrogen ITC: Electrolysis of Water
Whether a project, which used the chlor-alkali process or the chlorate process to produce inter alia hydrogen, 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 indicated that the term "electrolysis of water" was a technical term defined on the Natural Resources Canada website as “a process that splits water (H₂O) into hydrogen and oxygen using an electric current” and that this process does not produce any other products.
In contrast, the chlor-alkali process involved the electrolysis of sodium chloride solution to produce sodium hydroxide, along with chlorine and hydrogen. Similarly, the chlorate process involved the electrolysis of a sodium chloride solution to produce chlorate compounds and hydrogen. In both cases, the hydrogen was considered a byproduct, representing 1% by mass of the products in the case of the chlor-alkali process and 5% by mass in the case of the chlorate process.
Accordingly, CRA concluded that neither process constituted the electrolysis of water.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Statutory Interpretation - Ordinary Meaning | technical meaning of a technical term to be applied | 88 |