Clean hydrogen tax credits revealed in Canadian 2023 Budget

The Government of Canada on Tuesday (March 28) in its 2023 Budget revealed details for its CAD$5.6bn ($4.1bn) Clean Hydrogen Investment Tax Credit, outlining the role of the Canada Growth Fund in helping to launch the nation’s green hydrogen sector.

Announced last November (2022), the investment tax credit is set to be available for clean hydrogen production based on the lifecycle carbon intensity of hydrogen to ensure Canadian companies can remain globally competitive.

Read more:Canada looks to introduce tax credits to support clean hydrogen investments

Supporting between 15-40% of eligible projects, the credit offers a tiered structure based on hydrogen carbon intensity, with projects producing less than 0.75kg CO2/kg H2 receiving a 40% credit, 0.75-2kg CO2/kg H2 receiving 25% and 2-<4kg CO2/kg H2 getting just 15%.

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