Australia Introduces Tax Incentives for Renewable Hydrogen and Critical Minerals Production
Key Ideas
- Australia has passed new legislation to provide tax incentives for companies involved in producing renewable hydrogen and processing critical minerals, with benefits kicking in from July 2027.
- Eligible producers can receive tax discounts for up to a decade per project, while a 10% production tax credit is introduced for refining critical minerals like lithium and nickel.
- The incentives, totaling AUD 13.7 billion over 10 years, are part of Australia's Future Made in Australia policy, aiming to boost green industries and reduce reliance on external supply chains.
- Federal Energy Minister Chris Bowen emphasized the importance of these incentives in harnessing economic and industrial opportunities during the net-zero transition, a sentiment echoed by industry stakeholders.
Australia has recently passed new legislation aimed at providing tax incentives to companies engaged in the production of renewable hydrogen and processing critical minerals. Starting from July 2027, eligible producers will be able to benefit from tax discounts for up to 10 years per project. Additionally, a 10% production tax credit has been introduced for refining critical minerals such as lithium and nickel, also available for a decade. These measures are part of the government's Future Made in Australia policy, with the collective incentives estimated at AUD 13.7 billion over the course of 10 years. Federal Energy Minister Chris Bowen highlighted the significance of these tax incentives in grasping the substantial economic and industrial prospects presented by the transition to a net-zero future. The industry stakeholders have widely praised the passage of this bill, recognizing the positive impact it could have on boosting green industries and reducing dependence on foreign supply chains.