Australia Introduces Legislation to Boost Critical Mineral and Renewable Hydrogen Production
Key Ideas
- The Australian Government is set to introduce legislation providing tax incentives for critical mineral production, offering 10% of processing costs for 31 listed minerals over 10 years per project.
- Renewable hydrogen production will also benefit from a new tax incentive of $2 per kilogram produced during the same period, aiming to attract investment in cleaner energy.
- The legislation aims to provide clarity and certainty for investors to contribute to adding value to Australia's natural resources, supporting cheaper and cleaner energy production.
- Australia's efforts to boost domestic manufacturing and renewable energy include a $22.7 billion package under the Future Made in Australia scheme over the next decade.
The Australian Government is expected to introduce legislation to provide tax incentives for the production of critical minerals. This law will offer a tax incentive worth 10% of processing and refining costs for 31 critical minerals essential for Australia's technologies, economies, and national security. Additionally, renewable hydrogen production will receive a tax incentive of $2 per kilogram produced during the same period. The scheme aims to run for 10 years per project, starting in June 2028. Treasurer Jim Chalmers highlighted that the legislation will give investors clarity and certainty to invest in value-adding natural resources and support the transition to cheaper and cleaner energy. The move aligns with global trends, as major economies are investing in clean energy projects to compete in key industries like electric vehicles and semiconductors. Despite challenges in the market, Australia remains committed to boosting domestic manufacturing and renewable energy with a significant $22.7 billion investment under the Future Made in Australia scheme. This investment is part of Australia's ambition to become a renewable energy superpower.