Tax Incentives Introduced by Australian Government for Hydrogen and Critical Minerals
The bill introduces a $2 tax credit for each kilogram of hydrogen produced.
The Albanese Labor government has presented a new bill to promote the development of hydrogen and critical minerals in Australia.
The Future Made in Australia (Production Tax Credit and Other Measures) Bill includes a Hydrogen Production Tax Incentive of $2 for every kilogram of hydrogen produced from 2027–28 to 2039–40, applicable for a maximum of 10 years per project.
The second component is the Critical Minerals Production Tax Incentive, which offers a 10 percent rebate on processing and refining costs for Australia’s 31 critical minerals during the same period.
According to a joint statement from Treasurer Jim Chalmer and Ministers Chris Bowen (energy), Madeleine King (resources), and Tim Ayres (assistant minister for a Future Made in Australia) on Nov. 25, these incentives are designed to attract private investment into projects that support decarbonization and contribute to key renewable energy technologies like wind turbines, solar panels, and electric vehicles.
Recipients of the incentives must adhere to six “Community Benefit Principles” specified in the legislation, with specific requirements to be determined after public consultation.
The original Bill, introduced in August, is intended to jumpstart Australia’s advanced manufacturing sector, including green energy, independent of Chinese supply chains.
