Income Tax Act — I-3.3 127.48
eligible renewable hydrocarbon to expected carbon intensity is to be calculated in proportion to the number of years for which that hydrocarbon will be used during the first 20 years of the project’s operations, and (ii) in any other case, the input carbon intensity of the relevant eligible hydrocarbon is to be taken into account in applying the Fuel LCA Model; (h) if the taxpayer disposes of any environmental attributes associated with any electricity described in subparagraph (e)(i) or (ii) or any eligible renewable hydrocarbon described in subparagraph (g)(i), the carbon intensity of the project is deemed to be greater than 4.5; (i) if, in connection with hydrogen production or electricity production in support of hydrogen production, the taxpayer uses heat energy (i) recovered from hydrogen production, recovered from electricity production by the taxpayer in support of hydrogen production or produced by the taxpayer from the combustion of hydrogen or eligible hydrocarbons (with carbon dioxide captured using a CCUS process), the contribution of the heat to carbon intensity is to be modelled as part of the project, (ii) recovered from a non-hydrogen production process of the taxpayer, or purchased from a vendor that produced the heat from eligible hydrocarbons or recovered the waste heat from a production process, the contribution of the heat to carbon intensity is to correspond with the input carbon intensity of purchased steam in the Fuel LCA Model, and (iii) from a source other than as described in subparagraph (i) or (ii), the carbon intensity of the project is deemed to be greater than 4.5; (j) the contribution to carbon intensity of the following may be disregarded: (i) delivering, collecting, recovering, treating or recirculating water, and (ii) energy used to compress hydrogen beyond 30 bar; (k) emissions related to the production of the following substances or types of energy produced in conjunction with hydrogen shall be attributed to hydrogen production: (i) off-gas (including tail gas and other fuel gas), (ii) oxygen, (iii) nitrogen, if the nitrogen is not used by the taxpayer in another production process or sold for commercial use, and (iv) heat from hydrogen production; (l) emissions related to heat produced in conjunction with electricity production by the taxpayer in support of hydrogen production shall be attributed to hydrogen production, if the heat is not used by the taxpayer in another production process or sold for commercial use; (m) emissions associated with energy used in the purification of hydrogen shall be attributed to hydrogen production; and (n) the Clean Hydrogen Investment Tax Credit – Carbon Intensity Modelling Guidance Document published by the Government of Canada is to apply conclusively with respect to the calculation of carbon intensity, except as otherwise required under this section. Changes to clean hydrogen project (7) Subsection (8) applies in respect of a qualified clean hydrogen project of a taxpayer if, before the first day of the compliance period of the project, (a) the Minister of Natural Resources determines that there has been a material change to the project design and requests that the taxpayer file a revised project plan for the project; (b) the taxpayer (i) does not file the final detailed engineering designs with the Minister of Natural Resources in accordance with paragraph (9)(d), (ii) changes the project’s eligible pathway, or (iii) reasonably expects that there will be an increase (as compared to the most recent project plan for the project) of more than 0.5 kilograms of carbon dioxide equivalent per kilogram of hydrogen to be produced by the project; (c) any eligible power purchase agreement referenced in the most recent clean hydrogen project plan of the taxpayer (i) has not been finalized and executed so as to become legally binding, or (ii) has been materially modified or terminated; or (d) any environmental attributes associated with the agreement have been d