The Federal Government’s new Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024 includes two tax incentives designed to position Australia as a critical part of the global net zero transformation.
The Bill, which the Federal Government is bringing to Parliament, is aimed at strengthening Australia’s economic resilience.
The legislation will implement the government’s production tax incentives for renewable hydrogen and critical minerals – both of which are essential to the world’s path to decarbonisation – and expand the role and remit of Indigenous Business Australia.
The legislation establishes the following two tax incentives:
- A Hydrogen Production Tax Incentive worth $2 per kilogram of renewable hydrogen produced between 2027–2028 and 2039–40 for up to ten years per project
- A Critical Minerals Production Tax Incentive worth ten per cent of relevant processing and refining costs for Australia’s 31 critical minerals, for critical minerals processed and refined between 2027–28 and 2039–40, for up to ten years per project
This Bill will help unlock private sector investment to build a stronger, more diversified and more resilient economy powered by renewable energy that creates secure, well‑paid jobs around the country.
A key priority of the Bill is ensuring the benefits from investment flow to local workers, industries and communities around Australia.
The government said it sees renewable hydrogen and critical minerals playing a central role in Australia’s net zero future and these tax incentives ensure these projects are delivered in ways that provide broader benefits to local communities.
The incentives will only be provided once projects are up and running, producing hydrogen or processing critical minerals used in products like wind turbines, solar panels and electric vehicles.
Recipients of the production tax incentives will also be required to deliver benefits relating to the six Community Benefit Principles included in the overarching Future Made in Australia Bill. The specific requirements will be detailed by rules set by the Treasurer, which will be subject to further consultation.
These tax incentives are designed to encourage and enable new industries that put Australia on a path to net zero and strengthen our economic resilience.
