Australia's New Hydrogen Production Tax Incentive and Critical Minerals Scheme
Key Ideas
  • The Federal Government of Australia introduced the Hydrogen Production Tax Incentive (HPTI) to support renewable hydrogen production through a refundable tax offset.
  • A 10% refundable tax offset for designated critical minerals processing and refining costs was also established under the new legislation.
  • The eligibility criteria for companies to benefit from the scheme include producing hydrogen with specific emission intensity limits and aligning with community benefit principles.
  • The Guarantee of Origin scheme was implemented to track product emissions and promote decarbonisation efforts, further supporting the hydrogen industry.
In Australia, the Federal Government has taken significant steps to promote renewable hydrogen production and support the critical minerals sector through new legislation. The Hydrogen Production Tax Incentive (HPTI) was announced in the 2024-25 Budget to incentivize the production of renewable hydrogen. The HPTI offers a refundable tax offset of $2 per kilogram of eligible hydrogen produced in Australia, available for up to 10 years. Additionally, the Critical Minerals Production Tax Incentive (CMPTI) provides a 10% refundable tax offset for processing and refining costs of designated critical minerals between 2027 and 2040. The eligibility criteria for companies to benefit from these incentives require producing hydrogen with specific emission intensity limits and aligning with community benefit principles. The legislation aims to ensure that the hydrogen is produced sustainably and contributes to local communities, industry, and diverse workforces. The Guarantee of Origin scheme introduced alongside the HPTI will track product emissions and create certificates for each kilogram of hydrogen produced, promoting transparency and decarbonisation efforts. These initiatives mark a significant move towards supporting the growth of the renewable hydrogen industry and maintaining global competitiveness.
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