Clean Hydrogen Offtake Agreement

CLEAN HYDROGEN OFFTAKE AGREEMENT

This Agreement is entered into as of [__/__/____] (the "Effective Date"), by and between:

RECITALS

WHEREAS, the Inflation Reduction Act ("IRA") established a production tax credit under 26 U.S.C. § 45V for clean hydrogen produced in the United States, with credits available to qualified facilities producing hydrogen with a carbon intensity ("CI") not exceeding specified thresholds;

WHEREAS, the Treasury Department finalized regulations under 26 U.S.C. § 45V (effective January 2025) establishing three pillars for credit eligibility: (i) incrementality of electricity; (ii) temporal matching (hourly by January 1, 2030); and (iii) deliverability within the same region;

WHEREAS, Seller owns and operates a hydrogen production facility (the "Project") utilizing [electrolysis PEM / electrolysis alkaline / SOEC / SMR+CCS] technology with a nameplate capacity of [___________] kg H₂/day, located in [____________________________];

WHEREAS, the Project's lifecycle carbon intensity has been calculated at [_____] kgCO₂e/kgH₂ using the Argonne National Laboratory GREET model, qualifying for the [Tier 1 / Tier 2 / Tier 3] credit under § 45V;

WHEREAS, Buyer seeks to procure clean hydrogen meeting Treasury § 45V compliance requirements for [use in / incorporation into / sale to] [_________________________________]; and

WHEREAS, Seller and Buyer desire to enter into this Offtake Agreement to establish terms and conditions for the sale and purchase of clean hydrogen produced at the Project.

1. DEFINITIONS

"Actual Annual Quantity" or "AAQ" means the volume of Product actually delivered in a Contract Year, measured in kilograms of H₂.

"Affiliate" means any entity directly or indirectly controlling, controlled by, or under common control with a party, where control means the power to direct management or policies.

"Carbon Intensity" or "CI" means the lifecycle greenhouse gas emissions expressed as kilograms of CO₂ equivalent per kilogram of hydrogen (kgCO₂e/kgH₂), calculated per Argonne GREET model version [____].

"Compliance Year" means the calendar year for purposes of § 45V credit determination and verification.

"Deliverability" means the ability of the Project to serve electricity consumers or renewable energy generation facilities (including transmission and distribution infrastructure) within the same region as hydrogen production, consistent with Treasury § 45V regional matching requirements.

"Energy Attribute Certificate" or "EAC" means a certificate representing the environmental attributes of one megawatt-hour (MWh) of renewable or zero-carbon electricity, including Renewable Energy Certificates (RECs) and Power Purchase Agreement (PPA) benefits, issued and retired pursuant to [applicable state or federal registry].

"Force Majeure Event" means an unforeseeable event beyond a party's control, including acts of God, war, terrorism, pandemic, grid failure, or regulatory action, preventing performance.

"GREET Model" means the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation model maintained by Argonne National Laboratory, used for CI calculation and verification.

"Incremental Electricity" means electricity generated by renewable or zero-carbon resources that would not have been generated but for the hydrogen production facility, subject to Treasury § 45V additionality requirements.

"Metering Equipment" means devices measuring hydrogen volume, purity, and associated electricity consumption at delivery point(s).

"Product" means clean hydrogen gas meeting the specifications in Section 5, produced by the Project and offered for sale by Seller.

"PTC" means the production tax credit under 26 U.S.C. § 45V, currently up to $3/kg H₂ depending on CI tier.

"Temporal Matching" means the alignment of renewable or zero-carbon electricity generation with hydrogen electrolysis production on an hourly basis (required by January 1, 2030), or on a more flexible quarterly/annual basis prior to that date, consistent with Treasury guidance.

"Third-Party Verifier" means an independent, qualified professional firm selected jointly by the parties to conduct annual CI and compliance audits.

2. PROJECT DESCRIPTION

1. Technology & Capacity: The Project utilizes [_________________________________] hydrogen production technology with a nameplate capacity of [_____] metric tons H₂ per annum ([_____] kg/day). Seller shall maintain operational availability of [_____]% per annum.

2. Location: The Project is located in [County/Region], [State/Country], grid operator [_________________________________], consistent with DOE Regional Hydrogen Hub [Hub Name] where applicable.

3. Carbon Intensity: The Project's verified CI (using Argonne GREET model version [____]) is [_____] kgCO₂e/kgH₂, qualifying for the [Tier 1: $3.00/kg / Tier 2: $2.50/kg / Tier 3: $1.75/kg] credit under § 45V.

4. Electricity Sources: The Project procures electricity from [describe renewable/zero-carbon sources: [PPA with [___], grid renewable credits, on-site solar, other]:

3. TERM

1. Initial Term: This Agreement shall commence on the Effective Date and continue for [____] years (the "Term"), unless earlier terminated pursuant to Section 12.

2. Renewal: The parties may mutually agree to renew this Agreement for successive [____]-year periods on terms to be negotiated.

4. PRODUCT SPECIFICATIONS

1. Purity: Hydrogen delivered shall meet ISO 14687-2 Type I grade purity (≥99.99% H₂), with maximum [_____] ppm total impurities.

2. Pressure: Hydrogen shall be delivered at [____] barg ([____] psig) ± [____] barg, or as agreed in writing.

3. Form: Hydrogen shall be delivered in [gaseous / liquid / compressed cylinder / tube trailer / other: _____________] form.

4. CI Certification: Each delivery batch or monthly aggregate shall be accompanied by a Third-Party Verifier statement confirming CI ≤ [_____] kgCO₂e/kgH₂.

5. Quality Standards: Seller shall maintain quality consistent with industry standards (ASTM [________], SAE J2719, or equivalent).

5. DELIVERY, TITLE & TRANSFER OF RISK

1. Delivery Point(s):
   - Primary: [___________________________]
   - Alternative: [___________________________]

2. Delivery Method: Hydrogen shall be delivered via [pipeline / truck transport / onsite production / hybrid: _________________].

3. Title Transfer: Title and all risk of loss pass to Buyer at the delivery point upon [measurement confirmation / signature / other: _______________].

4. Offtaker Acceptance: Buyer shall accept Product meeting Section 4 specifications. Hydrogen outside specifications may be rejected without penalty to Buyer, or accepted at a [____]% price reduction.

6. QUANTITY COMMITMENT

1. Annual Contract Quantity ("ACQ"): Buyer commits to purchase [_____] metric tons of H₂ annually ([_____] kg/day average), subject to Seller's operational availability.

2. Monthly Profile: Buyer shall request monthly offtake volumes per the schedule in Exhibit A (Project & Delivery Plan), with flexibility of ±[____]% month-to-month.

3. Take-or-Pay: Buyer shall pay for [___]% of the ACQ regardless of actual offtake. For volumes between [___]% and ACQ, payment is due for hydrogen actually delivered.

• Shortfall Payment: If Buyer fails to accept [___]% of ACQ (absent force majeure), Buyer shall pay [____]% of the applicable monthly price for unlifted volumes.
• Seller Underperformance: If Seller produces less than [___]% of ACQ (excluding force majeure), Buyer may either (i) accept actual volumes at the agreed price, or (ii) reduce take-or-pay obligations pro rata.

4. Excess Production: Hydrogen exceeding ACQ may be offered to Buyer at the prevailing monthly price. Seller is free to sell excess hydrogen to third parties.

7. PRICING & PAYMENT

1. Base Price: [_____] dollars per kilogram of hydrogen delivered, as adjusted per Section 7.2.

2. Price Escalation: The Base Price shall escalate [annually / based on CPI / based on index: _____________] at [____]% per annum, or as specified in Exhibit B (Pricing Schedule).

3. Invoicing: Seller shall invoice Buyer monthly within [____] days of month-end based on metered deliveries and agreed pricing. Payment due within [____] days of invoice.

4. Adjustment for § 45V Credits:
   - If Seller claims the PTC: The Base Price reflects Seller's retention of the § 45V credit and associated benefits.
   - If Buyer receives Transferability Benefit: The parties may execute Form 8941 and associated IRS Form 6418 elections to allocate credits to Buyer under § 6418(d) transferability provisions. Price shall be adjusted [downward by: _____% / as follows: _______________________].

5. Utility Pass-Through: Any material change in utility rates, grid connection fees, or transmission costs exceeding [____]% annually may trigger price reconciliation discussions.

8. 45V CLEAN HYDROGEN CREDIT COMPLIANCE FRAMEWORK

8.1 Incrementality (Pillar One)

1. Definition: Electricity powering the Project must be incremental—generated by renewable or zero-carbon resources that would not exist but for the hydrogen production facility's electricity demand (as of the facility's start date).

2. Verification: Seller shall provide:
   - Attestation from electricity supplier confirming incremental nature of renewable resources or PPAs, with commencement dates ≤ [____] months prior to Project start date.
   - Evidence of additionality (project financing, Power Purchase Agreement executed prior to hydrogen facility completion, etc.).
   - Annual certification by Third-Party Verifier.

3. Renewable Portfolio: Seller commits to source [____]% of Project electricity from incremental renewable/zero-carbon sources annually.

8.2 Temporal Matching (Pillar Two)

1. Compliance Timeline:
   - Through December 31, 2029: Flexible matching (quarterly or annual average alignment acceptable).
   - January 1, 2030 and thereafter: Hourly matching (electricity generation and hydrogen production must align on an hourly basis).

2. Hourly Matching Methodology (effective 2030):
   - Seller shall procure Power Purchase Agreements or real-time grid purchases ensuring that in each hour, renewable/zero-carbon electricity equals or exceeds electrolysis electricity consumption.
   - Seller may use Energy Attribute Certificates (EACs) to cover any hourly shortfalls, with EAC retirement aligned to hydrogen production hour.

3. EAC Procurement & Retirement:
   - Seller shall procure or generate EACs sufficient to cover [____]% of Project electricity annually.
   - EAC sources: [specify: on-site renewables / grid PPAs / REC purchases / other: _______________________].
   - All EACs shall be retired within [____] months following the Compliance Year in which hydrogen is produced.
   - Third-Party Verifier shall confirm EAC retirement per Exhibit D (EAC Sources & Retirement Plan).

8.3 Deliverability (Pillar Three)

1. Regional Matching: Hydrogen production and renewable/zero-carbon electricity generation must be located in the same region as defined by Treasury Final Rule § 45V regional matching requirements. For this Project:
   - Hydrogen Generation Region: [_____________________________]
   - Renewable Electricity Region: [_____________________________]
   - Grid Operator(s): [_____________________________]
   - Confirmation: [____] Regions match under Treasury guidance.

2. Infrastructure Linkage: Seller confirms that the Project's electricity supply (via PPA or grid), renewable generation, and hydrogen production infrastructure are operationally linked or served by the same transmission/distribution network, satisfying deliverability.

8.4 Third-Party CI Verification

1. Verifier Selection: Within [____] months of the Effective Date, the parties shall jointly select an independent Third-Party Verifier meeting Treasury requirements (qualified, unaffiliated, with GREET model expertise).

2. Annual Compliance Audit: The Verifier shall conduct an annual audit confirming:
   - Hydrogen production volumes (via metering data).
   - Electricity consumption and renewable/zero-carbon sources.
   - CI calculation using Argonne GREET model version [____].
   - Temporal matching compliance (if applicable in year).
   - Incrementality documentation review.
   - EAC procurement and retirement.

3. Audit Cost: Seller bears audit costs (estimated [_____] per annum); Buyer reimburses [___]% if requested to support Buyer's own § 45V derivative credit claims or alternative energy attribute valuations.

4. Documentation: Verifier shall issue an annual compliance certificate suitable for IRS Form 8941 filing, as specified in Exhibit E (45V Compliance Verification Plan).

9. VERIFICATION & METERING

1. Metering Equipment: Seller shall install and maintain accurate, calibrated metering equipment (±[____]% accuracy) at delivery point(s), measuring hydrogen volume, purity, and pressure. Buyer has inspection rights.

2. Data Sharing: Monthly metering data shall be provided to Buyer within [____] days of month-end, including volume, purity test results, and preliminary CI estimates.

3. Annual Testing: Metering equipment shall be recalibrated annually by [independent certified lab / third party: _______________].

4. Dispute Resolution: If metering discrepancies exceed [____]%, the parties may jointly commission a retest at [shared / Buyer's] expense.

10. ENVIRONMENTAL, HEALTH & SAFETY

1. Regulatory Compliance: Seller shall operate the Project in compliance with all federal, state, and local environmental, safety, and occupational health regulations, including:
   - Clean Air Act (40 CFR Parts 60, 63, 68)
   - OSHA standards for hydrogen handling (29 CFR § 1910.103)
   - DOT regulations for hydrogen storage and transport (49 CFR §§ 172, 173, 177)
   - NFPA 2 (Hydrogen Technologies Code)

2. Leak Detection & Monitoring: Seller shall maintain [continuous / quarterly] leak detection systems and report any hydrogen releases > [_____] kg/day to Buyer within [____] hours.

3. Safety Documentation: Seller shall provide Buyer with current Safety Data Sheets (SDS), Process Safety Management (PSM) plans, and emergency response procedures upon request.

4. Insurance: See Section 11 (Insurance).

11. INSURANCE

1. Property & Casualty: Seller shall maintain property and casualty insurance covering the Project facility at not less than [_____]% of replacement value, with Buyer named as additional insured.

2. Liability: Seller shall maintain general liability insurance with minimum limits of [_____] per occurrence / [_____] aggregate, covering hydrogen production and delivery operations.

3. Product Liability: If Buyer resells hydrogen, Buyer shall maintain product liability insurance at Buyer's expense with minimum limits of [_____] per occurrence.

4. Certificates of Insurance: Seller shall provide certificates of insurance within [____] days of policy inception and [____] days prior to any expiration.

12. TERM & TERMINATION

1. Termination for Cause:
   - Material Breach: If either party materially breaches this Agreement and fails to cure within [____] days of written notice, the non-breaching party may terminate effective upon [____] days' written notice.
   - Force Majeure: If a Force Majeure Event prevents performance for more than [____] consecutive days, either party may terminate upon [____] days' notice (see Section 13).
   - Regulatory Change: If a change in law makes performance impossible or commercially impracticable (see Section 14), either party may terminate.

2. Termination for Convenience: This Agreement may be terminated by mutual written consent of both parties.

3. Effect of Termination:
   - Buyer shall pay for all hydrogen delivered and accepted through termination date.
   - Seller shall cooperate in wind-down and provide any remaining committed inventory at agreed prices.
   - Sections 2, 4, 8.4, 9, 10, 11, 15, and 17 shall survive termination.

13. FORCE MAJEURE

1. Excused Performance: Neither party shall be liable for failure to perform due to a Force Majeure Event, provided the affected party gives prompt written notice and makes reasonable efforts to resume performance.

2. Exceptions: Force majeure does not excuse payment obligations, except that Seller's take-or-pay obligations shall be suspended for periods when hydrogen production is prevented by force majeure.

3. Duration: If force majeure prevents performance for more than [____] consecutive days, the non-affected party may terminate per Section 12.1(c).

14. CHANGE IN LAW

1. Regulatory Changes: If a change in law, regulation, or Treasury guidance materially affects the Project's economics, compliance costs, or § 45V credit eligibility (e.g., CI threshold reduction, incrementality redefinition), either party may request good-faith renegotiation.

2. Credit Preservation: If new Treasury guidance reduces the Project's PTC tier or credit amount, Seller may adjust pricing to reflect reduced benefits, subject to Buyer negotiation.

3. Impossibility: If a change in law makes performance illegal or fundamentally impossible, either party may terminate per Section 12.1(c).

15. ASSIGNMENT & CHANGE OF CONTROL

1. Assignment Restrictions: Neither party shall assign this Agreement without the other's prior written consent, except:
   - Buyer may assign to an Affiliate or to a successor entity, provided assignee assumes all obligations.
   - Seller may assign to a lender or equity investor under customary project finance structures, with lender consent rights only.

2. Form 8941 / Form 6418 Transfer: Any assignment affecting § 45V credit allocation shall include executed Forms 8941 and 6418 (or successor IRS forms) confirming credit transferability under § 6418.

3. Effect of Assignment: An assignment that violates this section is void; the assigning party remains liable to the other.

16. DISPUTE RESOLUTION

1. Negotiation: Disputes arising under this Agreement shall first be resolved through good-faith negotiation between senior representatives of the parties within [____] days.

2. Mediation: If negotiation fails, disputes shall proceed to non-binding mediation administered by [JAMS / AAA / other: ________________], at the parties' shared expense (unless one party unreasonably refuses to participate).

3. Arbitration / Litigation:
   - Arbitration: Either party may submit unresolved disputes to binding arbitration under [AAA Commercial Arbitration Rules / other: ________________], with a single arbitrator or three-arbitrator panel if dispute value exceeds [_____].
   - OR Litigation: Disputes shall be resolved in the state or federal courts located in [________________________].

4. Interim Measures: Notwithstanding dispute resolution provisions, either party may seek injunctive relief for breach of confidentiality or IP infringement.

17. MISCELLANEOUS

1. Entire Agreement: This Agreement (including exhibits) constitutes the entire agreement between the parties and supersedes all prior negotiations and understandings.

2. Amendments: Amendments must be in writing and signed by authorized representatives of both parties.

3. Severability: If any provision is found unenforceable, such provision shall be reformed to the minimum extent necessary, and remaining provisions shall remain in effect.

4. Notices: All notices shall be in writing and deemed delivered when sent by email (with read receipt), overnight courier, or certified mail to addresses specified in the signature blocks.

5. Governing Law: This Agreement shall be governed by the laws of [_____________________], without regard to conflict of law principles.

6. Counterparts & Electronic Execution: This Agreement may be executed in multiple counterparts (each an original, collectively one instrument) and by electronic signature.

7. Waiver: Waiver of any provision or breach must be in writing. Waiver of one breach does not constitute waiver of future breaches.

8. Confidentiality: Each party agrees to maintain the confidentiality of commercially sensitive information (pricing, production data, technical specifications) disclosed by the other party, except as required by law or regulatory authority.

9. Public Announcements: Neither party shall issue press releases or public statements regarding this Agreement without the other's prior written consent (not to be unreasonably withheld), except as required by securities law or stock exchange rules.

SIGNATURE BLOCKS

SELLER:

[_________________________]
By: [_________________________]
Name: [_________________________]
Title: [_________________________]
Date: [__/__/____]

BUYER:

[_________________________]
By: [_________________________]
Name: [_________________________]
Title: [_________________________]
Date: [__/__/____]

EXHIBITS

EXHIBIT A – PROJECT DESCRIPTION & DELIVERY PLAN

Monthly Offtake Profile (for planning purposes):

EXHIBIT B – PRICING SCHEDULE

Price Adjustment Triggers: [Describe CPI indexing, utility rate pass-through, or other mechanisms]

45V Credit Allocation:

• ☐ Seller retains PTC; price reflects full credit value.
• ☐ Buyer receives § 6418 transferability benefit; price adjusted downward by [____]%.

EXHIBIT C – CARBON INTENSITY CALCULATION & VERIFICATION

EXHIBIT D – EAC SOURCES & RETIREMENT PLAN

Temporal Matching Schedule (Effective Jan 1, 2030):

• Monthly/quarterly aggregation through Dec 31, 2029.
• Transition to hourly matching Jan 1, 2030 per Treasury guidance.

EXHIBIT E – 45V COMPLIANCE VERIFICATION PLAN

Third-Party Verifier: [_____________________________]
Contact: [_____________________________]
Annual Audit Scope:

• ☐ Hydrogen production metering (volume, purity).
• ☐ Renewable electricity procurement and EAC retirement.
• ☐ Carbon intensity calculation (GREET model).
• ☐ Incrementality documentation.
• ☐ Temporal matching validation.
• ☐ Form 8941 / Form 6418 readiness.

Audit Timeline: [_____________________________]
Cost: $[_____] per annum (borne by Seller; reimbursement provisions in Section 8.4).

SOURCES AND REFERENCES

• 26 U.S.C. § 45V: Production Tax Credit for Clean Hydrogen (IRA 2022)
• Treasury Final Rule § 45V (January 2025): https://www.treasury.gov/press-center/ (Search: Clean Hydrogen PTC Final Rule)
• Argonne National Laboratory GREET Model: https://greet.anl.gov/ (Lifecycle assessment for hydrogen CI calculation)
• DOE Regional Hydrogen Hubs: https://www.hydrogen.energy.gov/h2hubs (IIJA H2 Hub program, regional matching guidance)
• NFPA 2, Hydrogen Technologies Code (2024 edition): National Fire Protection Association
• ISO 14687-2: Hydrogen fuel quality standard (purity grades)
• 49 CFR Part 173: DOT hazardous materials transportation regulations
• 29 CFR § 1910.103: OSHA hydrogen handling & storage standards
• IRS Form 8941: Clean Hydrogen Production Credit (annual claim)
• IRS Form 6418: Elective Payment for Energy Credit (transferability under § 6418)