The Australian government has introduced a significant hydrogen production tax credit bill to Parliament.
This legislation aims to encourage the production of green hydrogen by providing a $2 per kilogram credit for hydrogen produced between 2027–2028 and 2039–40. However, approval is needed during the last week of parliament for the year.
The proposed bill has gained support from various sectors as it promises clarity and stability for investments in renewable hydrogen and critical minerals. Industry advocates argue the bill is crucial to making green hydrogen production viable in Australia, encouraging new jobs, taxes, and royalties.
Despite support, the bill faces opposition from the Coalition. Some view it as disproportionately benefiting large corporations. The Senate Greens and independents also express mixed feelings. However, industry proponents emphasize the bill’s importance in fostering future opportunities and industrial growth in Australia.
The bill includes a tax credit for processing 31 critical minerals, covering 10 percent of costs for production from 2027–2028 to 2039–40. This component aims to attract more investment in Australia’s mining sector, but has caused friction within political circles due to its perceived inadequacies.
Australia’s green hydrogen ambitions have struggled compared to incentives offered internationally. Advocates like Anna Freeman believe this bill, despite not fully bridging the cost gap, is essential for establishing a foothold in a growing market. The goal is to position Australia competitively in industrial processes using green hydrogen, which is integral to decarbonizing difficult sectors.
