The Australian government has introduced the Future Made in Australia Bill 2024 to parliament, in a bid to make the country “indispensable” to the global net-zero transformation.

Ministers on Monday stressed the importance of two incentives as part of the legislation – Hydrogen Production Tax Incentive (HPTI) and the Critical Minerals Production Tax Inventive.

The former will provide AUD 2 ($1.3) per kilogram of renewable hydrogen produced between 2027-2028 and 2039-2040, for up to 10 years per project. The latter, meanwhile, will provide 10% of relevant processing and refining costs for 31 identified critical minerals. The critical minerals incentive covers the same period as the hydrogen incentive, Kallanish understands.

The subsidies will only be given once projects are up and running, producing hydrogen or processing critical minerals, the government says. Project developers receiving financial backing from Australia are also required to deliver benefits relating to the six Community Benefit Principles included in the AUD 22.7 billion Future Made in Australia Bill. Treasurer Jim Chalmers will detail the specific requirements, which will be subject to further consultation.  

It is unclear when a vote is scheduled that would enable the bill to progress to the Senate before passing as law. However, Chalmers is expected to face a struggle ahead of next year’s election without coalition support. The bill is key to the Future Made in Australia agenda, and comes amid growing uncertainty on clean technology investment.

HPTI will be delivered through Australia’s tax system as a “refundable tax offset,” according to the country’s Department of Climate Change, Energy, the Environment and Water. Essentially, it seeks to bring forward project development, make renewable H2 available sooner and build scale to reduce production costs over time.

The country has five yearly production milestones out to 2050, targeting at least 15 million tonnes/year of H2, which could be doubled to 30m t/y. “Developing a renewable hydrogen industry represents a significant economic opportunity for Australia for export and domestic use. This is through value-added manufacturing of green ammonia and fertilisers, iron and alumina,” the government adds.

Having identified 31 minerals considered crucial for the energy transition, Australia is a mining powerhouse, though it lacks downstream capability. The new incentive seeks to boost investment into processing and refining, adding value to minerals and providing the world with an ex-China supply chain.