Treasurer, Jim Chalmers, has released consultation papers seeking feedback on the Federal Government’s proposed $13.7 billion critical minerals and hydrogen production tax incentives.
The production tax credits are designed to incentivise investment in renewable hydrogen, boost production of critical minerals and create jobs and opportunities for Australians.
The incentives come as part of the Federal Government’s Future Made in Australia package in the Budget.
Critical Minerals Production Tax Incentive
This incentive is consistent with the Federal Government’s Critical Minerals Strategy 2023-2030.
It is expected to assist to extract more value onshore from Australian resources by building sovereign capability in critical minerals processing.
The Critical Minerals Production Tax Incentive will allow eligible entities to claim ten per cent of expenditure for processing and refining any of the 31 minerals currently published on the government’s Critical Minerals list.
Australia is home to some of the world’s largest reserves of critical minerals needed to diversify supply chains and support low emissions technologies, including lithium, cobalt and rare earth elements.
The Hydrogen Production Tax Incentive
The Hydrogen Production Tax Incentive is a time‑limited measure to accelerate the growth of Australia’s hydrogen industry.
It’s intended to bring forward project development, make renewable hydrogen available sooner and build scale to reduce production costs over time.
Hydrogen opens the door to green metals, including iron, steel, alumina and aluminium, which are critical to industrial decarbonisation and expected to play a key role in the net zero transformation.
Both papers are now available on the Treasury website and consultation will continue until 12 July 2024.
Mr Chalmers said that the production tax incentives are an important part of the Future Made in Australia agenda.
“By partnering with the private sector, we’ll will unlock more investment in the jobs and industries of the future to the benefit of all Australians.”
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