Tax credit bill to support growth in hydrogen and critical minerals passes Senate
The Federal Government has passed new tax credits for hydrogen and critical minerals, providing production-based incentives to support industry growth and job creation
The Federal Government’s Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024 has passed the Senate, introducing production-based tax credits to encourage investment in hydrogen and critical minerals.
The legislation, among the largest support packages for the resources sector passed by Parliament, offers two key tax incentives:
- A Hydrogen Production Tax Incentive of $2 per kilogram for renewable hydrogen produced between 2027–28 and 2039–40, available for up to ten years per project.
- A Critical Minerals Production Tax Incentive covering ten per cent of processing and refining costs for Australia’s 31 listed critical minerals, also available for up to ten years per project.
The incentives will only be provided once projects are operational and producing hydrogen or refining critical minerals used in technologies such as wind turbines, solar panels, and electric vehicles. Critical minerals are also essential for defence applications, including submarine and aircraft construction.
Clean Energy Council General Manager – Advocacy and Investment, Anna Freeman, said the Bill, which provides refundable tax credits for onshore production of green hydrogen and processing of critical minerals, would help to make Australia a more competitive investment destination for the global growth industries of clean fuels, low-emissions metals and critical minerals.
"This is a red-letter day for Aussie manufacturing and jobs. This bill stands to unlock billions of dollars in private investment, jumpstart the development of new industries, and create thousands of new jobs," Freeman said.
With the bill now passed, attention will turn to project development and investment decisions ahead of the incentives taking effect in 2027
