Australian Parliament Passes Production Tax Credits for Hydrogen and Minerals Processing
Key Ideas
  • Production tax credits for hydrogen and critical minerals processing have passed Australian parliament after a deal with the Greens.
  • The legislation aims to fund clean energy projects and create jobs for the decarbonisation transition, with hydrogen producers and critical minerals producers receiving incentives.
  • The passing of the laws was praised by ACTU president Michele O'Neil and Australian Workers' Union national secretary Paul Farrow, who highlighted the potential for job creation and domestic manufacturing capabilities.
  • Industry players, including Fortescue Metals, have also welcomed the legislation as a crucial step towards building a green iron metal industry in Australia.
Production tax credits for hydrogen production and critical minerals processing have all but passed Australia's parliament after the government reached a deal with the Greens. The legislation, part of the $22.7 billion Future Made in Australia manufacturing policy, aims to support clean energy projects and job creation for decarbonisation. The incentives include a tax incentive of $2 per kilogram of renewable hydrogen produced between 2027/28 and 2039/40, as well as 10% of processing and refining costs for critical minerals producers. Despite some pushback and claims of red tape, the laws were ultimately passed in the Senate. Labor and the Greens advocated for community benefit principles and consultation processes for projects on First Nations land. The legislation was also seen as a strategic move to prevent the establishment of nuclear power plants in Australia. The passing of the laws was met with positive reactions from various stakeholders in the industry, with emphasis on the potential for job creation, domestic manufacturing growth, and the development of a green iron metal industry.
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