Companies producing renewable hydrogen or processing critical minerals will receive tax incentives.
On Monday, the Australian government introduced a bill to Parliament to implement tax incentives for renewable hydrogen and critical mineral production. The Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024 represents a $4.5 billion (AUS$7 billion) commitment to the sector and is a central component of the overarching Future Made in Australia initiative, which Prime Minister Anthony Albanese unveiled in April (we reported). In detail, the now-introduced legislation contains two provisions: a hydrogen production credit, which provides companies with roughly $1.3 per kilogram produced, and a critical mineral production credit, which provides ten percent of processing and refining costs for Australia’s 31 critical minerals.
Mining alone will not be eligible for the measures, a move praised by the Association of Mining and Exploration Companies (AMEC). In a press statement, the association emphasized Australia’s critical mineral potential, adding that incentivizing companies to invest in value-adding production benefits the whole economy and would “outweigh the cost of the incentive.”
In addition to these requirements, companies must bring benefits relating to the six Community Benefit Principles introduced under the Future Made in Australia bill, including promoting secure jobs and positive impacts on the domestic economy. The full requirements will be detailed by rules set by the Treasurer, which are yet to be determined.
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