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Released March 06, 2025 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Australia's Senate has endorsed the government's planned tax credits for the increased production of green hydrogen and critical minerals.
The move clears the way for the government to formally introduce its 10-year, AUD$2 per kilogram (kg) (US$1.25/kg) green hydrogen tax credit for producers, worth AUD$6.7 billion (US$4.2 billion). The Hydrogen Production Tax Incentive is designed to bridge the gap with cheaper fossil fuels and will run from 2027-28 to 2039-40. At the same time, the Critical Minerals Production Tax Incentive will cover 10% of the relevant processing and refining costs for Australia's 31 critical minerals, over the period 1 July 2027 to 30 June 2040. The critical minerals incentive is valued at AUD$7 billion (US$4.4 billion) over the decade. The government said the incentives will support first-mover Australian projects reaching final investment decision (FID) and operations. They form part of the government's wider Future Made in Australia program. Industrial Info is tracking more than 130 green hydrogen projects in Australia worth in excess of US$30 billion in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.
"This is all about building Australia's future: seizing the vast economic and industrial opportunities from the global net zero transformation and strengthening our economic resilience," said Minister for Climate Change and Energy Chris Bowen in a joint statement. "It's all about making sure the benefits from investment flow to local workers, industries and communities around Australia. The legislation is one of the largest packages of support for the resources sector passed by Federal Parliament. The production tax credits will help build industries of the future here in Australia, while creating good, well-paid local jobs."
With regard to critical minerals, Federal Resources Minister Madeleine King said the incentives will be a game-changer for the sector. "The passing of this legislation is a historic moment for the resources industry and a big deal for resource states like Western Australia and Queensland. By processing more of these minerals here in Australia we will create jobs and diversify global supply chains. Critical minerals and rare earths are key to the world's efforts to reduce emissions and they vital for our national security."
The incentives were welcomed by the industrial sector. "Establishing a hydrogen production tax incentive keeps Australia in the race globally and provides greater certainty to investors while also setting us up to achieve the goals set out in our National Hydrogen Strategy," commented Fiona Simon, chief executive officer of the Australian Hydrogen Council. "There is no 'do nothing option' when it comes to hydrogen. We need it as a large-scale option for decarbonising energy that requires molecules. And we need it as a chemical solution to produce commodities like green iron. And we also need to remain a trusted energy partner across Asia and the export of molecules is critical to Australia's ongoing prosperity."
Australia is one of the biggest markets for green hydrogen projects in the world, but there have been a number of notable setbacks with some of its largest developments. Last month, the regional Queensland government unexpectedly withdrew funding from the country's largest proposed green hydrogen project, the AUD$12.5 billion (US$7.85 billion) Central Queensland Hydrogen Project (CQ-H2) in Gladstone, citing economic concerns. The project, which was denied up to AUD$1 billion (US$620 million) in funding support, had progressed to the front-end engineering and design (FEED) stage and was expected to reach financial close by mid-2025. Late last year, Industrial Info reported that one the country's largest planned green hydrogen and ammonia projects at Gibson Island was abandoned after the fertilizer company Incitec Pivot Limited (Southbank, Australia) revealed plans to sell the land that was earmarked as the location. A deal had previously been struck with the green energy arm of Australian mining giant Fortescue Metals Group Limited (Perth) to build a 500-megawatt (MW) electrolyser that would be capable of producing 70,000 tonnes per year (T/yr) of green hydrogen that the plant would use to make 400,000 T/yr of green ammonia. Subscribers to Industrial Info's Global Market Intelligence (GMI) Chemical Processing project and plant databases can click here for the project report and click here for the plant profile. For additional information, see November 21, 2024, article - Australia's Landmark Green Hydrogen Project Abandoned.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The move clears the way for the government to formally introduce its 10-year, AUD$2 per kilogram (kg) (US$1.25/kg) green hydrogen tax credit for producers, worth AUD$6.7 billion (US$4.2 billion). The Hydrogen Production Tax Incentive is designed to bridge the gap with cheaper fossil fuels and will run from 2027-28 to 2039-40. At the same time, the Critical Minerals Production Tax Incentive will cover 10% of the relevant processing and refining costs for Australia's 31 critical minerals, over the period 1 July 2027 to 30 June 2040. The critical minerals incentive is valued at AUD$7 billion (US$4.4 billion) over the decade. The government said the incentives will support first-mover Australian projects reaching final investment decision (FID) and operations. They form part of the government's wider Future Made in Australia program. Industrial Info is tracking more than 130 green hydrogen projects in Australia worth in excess of US$30 billion in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.
"This is all about building Australia's future: seizing the vast economic and industrial opportunities from the global net zero transformation and strengthening our economic resilience," said Minister for Climate Change and Energy Chris Bowen in a joint statement. "It's all about making sure the benefits from investment flow to local workers, industries and communities around Australia. The legislation is one of the largest packages of support for the resources sector passed by Federal Parliament. The production tax credits will help build industries of the future here in Australia, while creating good, well-paid local jobs."
With regard to critical minerals, Federal Resources Minister Madeleine King said the incentives will be a game-changer for the sector. "The passing of this legislation is a historic moment for the resources industry and a big deal for resource states like Western Australia and Queensland. By processing more of these minerals here in Australia we will create jobs and diversify global supply chains. Critical minerals and rare earths are key to the world's efforts to reduce emissions and they vital for our national security."
The incentives were welcomed by the industrial sector. "Establishing a hydrogen production tax incentive keeps Australia in the race globally and provides greater certainty to investors while also setting us up to achieve the goals set out in our National Hydrogen Strategy," commented Fiona Simon, chief executive officer of the Australian Hydrogen Council. "There is no 'do nothing option' when it comes to hydrogen. We need it as a large-scale option for decarbonising energy that requires molecules. And we need it as a chemical solution to produce commodities like green iron. And we also need to remain a trusted energy partner across Asia and the export of molecules is critical to Australia's ongoing prosperity."
Australia is one of the biggest markets for green hydrogen projects in the world, but there have been a number of notable setbacks with some of its largest developments. Last month, the regional Queensland government unexpectedly withdrew funding from the country's largest proposed green hydrogen project, the AUD$12.5 billion (US$7.85 billion) Central Queensland Hydrogen Project (CQ-H2) in Gladstone, citing economic concerns. The project, which was denied up to AUD$1 billion (US$620 million) in funding support, had progressed to the front-end engineering and design (FEED) stage and was expected to reach financial close by mid-2025. Late last year, Industrial Info reported that one the country's largest planned green hydrogen and ammonia projects at Gibson Island was abandoned after the fertilizer company Incitec Pivot Limited (Southbank, Australia) revealed plans to sell the land that was earmarked as the location. A deal had previously been struck with the green energy arm of Australian mining giant Fortescue Metals Group Limited (Perth) to build a 500-megawatt (MW) electrolyser that would be capable of producing 70,000 tonnes per year (T/yr) of green hydrogen that the plant would use to make 400,000 T/yr of green ammonia. Subscribers to Industrial Info's Global Market Intelligence (GMI) Chemical Processing project and plant databases can click here for the project report and click here for the plant profile. For additional information, see November 21, 2024, article - Australia's Landmark Green Hydrogen Project Abandoned.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
