Australia prioritises renewable hydrogen and critical minerals in its net-zero strategy to support global decarbonisation efforts. Credit: Andrzej Rostek/Shutterstock.

The Australian Government will introduce the Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024 to Parliament, marking a significant advancement in the nation’s journey towards becoming a key player in the global net-zero transformation.

The bill outlines two primary tax incentives designed to spur private sector investment in renewable energy sectors, creating secure, well-paid jobs across Australia.

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The first is a hydrogen production tax incentive, which offers $2/kg of renewable hydrogen produced from 2027–28 to 2039–2040, for up to ten years per project.

The second is a critical minerals production tax incentive, providing a 10% tax credit on relevant processing and refining costs for Australia’s 31 critical minerals that are processed and refined during the same period.

The legislation aims to leverage the economic and industrial opportunities presented by net-zero transformation, enhancing the country’s economic resilience.

Renewable hydrogen and critical minerals are pivotal to global decarbonisation efforts, and the Australian Government is positioning these resources at the heart of its net-zero strategy.

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The tax incentives are designed to provide the necessary clarity and certainty for industry players to confidently invest in Australian renewable hydrogen and critical minerals projects.

However, these incentives will only be available once the projects are operational, producing hydrogen or processing critical minerals utilised in products such as wind turbines, solar panels and electric vehicles.

Furthermore, recipients of the production tax incentives are mandated to deliver benefits aligned with the six community benefit principles of the Future Made in Australia bill.

The specific requirements will be outlined by rules set by the treasurer, following further consultation.