Today the Federal Government’s Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024 passed the Senate in hopes of supporting Australia’s efforts to decarbonise industries and produce and process more of the minerals needed for the energy transition.
The credits are aimed at building Australia’s future and seizing the economic and industrial opportunities from the global net zero transformation.
The legislation is one of the largest packages of support for the resources sector passed by the Federal Parliament.
The production tax credits are set to help build industries of the future here in Australia, while creating good, well-paid local jobs.
The legislation establishes two tax incentives:
- 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.
- 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.
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.
Critical minerals are also vital to the defence industry and are needed for the construction of submarines and aircraft.
These tax incentives have the potential to leverage traditional strengths and encourage and enable new industries which help maximise our opportunities in the global net zero transformation.