Senate Committee approves tax incentives for critical mineral production

Senator Jess Walsh is calling for the Albanese government's Future Made in Australia hydrogen and critical minerals production tax credits to be passed through Parliament quickly, after the Senate Economics Legislation Committee report recommended that the Bill be passed.

The Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024 was referred to the Senate Economics Legislation Committee in late November for inquiry and report.

The bill introduces the hydrogen production tax Incentive (HPTI) which is a refundable tax offset that is available at a rate of $2 for a kilogram of eligible hydrogen for companies that satisfy the eligibility requirements.

It also introduces the critical minerals production tax incentive (CMPTI), a refundable tax offset to support the processing of critical minerals in Australia.

The committee handed down its report last week, stating that the proposed tax measures were a critical initiative for ensuring that Australian industry and workers benefit from the the industrial transition to decarbonise the economy.

"The production tax incentives will be a critical enabler to the growth and development of Australia’s renewable hydrogen and critical minerals processing sectors, and aligns directly with the government’s intentions to attract global capital, accelerate investment in the net zero transition and support economic resilience and security," the report said.

Chair of the committee, Jess Walsh said the net zero transformation was a golden opportunity for Australia and that the bill would bring Australia one step closer.

“The Senate should pass this bill – so we can deliver a Future Made in Australia that will benefit both industry and workers," said Walsh.

Greens Senator Nick McKim said the bill would encourage investment in renewable hydrogen and critical minerals, and expand the remit of Indigenous Business Australia.

"The urgent need to rapidly transition to renewable economies presents a unique opportunity for Australia to become a renewable energy superpower, and schemes like the tax credits proposed in the bill are important for creating market confidence and encouraging the investment needed for Australia to do so," said McKim.

"Australia is well positioned to help unblock global bottlenecks on the resources needed for global decarbonisation. Inputs like renewable hydrogen and critical minerals will be a critical part of this, with great potential to contribute significantly to Australia’s economy and job creation in the renewable transition."