Bill to introduce tax incentives for critical minerals enters parliament
The government has introduced a bill to implement tax incentives for hydrogen production and critical mineral production as part of its Made in Australia reforms package.
On Monday, Treasurer Jim Chalmers introduced the Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024 bill into the lower house, which is designed to help Australian businesses take advantage of the global transition to net zero.
The legislation implements production tax incentives for renewable hydrogen and critical minerals, and also expands the role and remit of Indigenous Business Australia, according to the Treasurer.
"This is all about seizing the vast economic and industrial opportunities from the global net zero transformation and strengthening our economic resilience," Chalmers said.
"This bill will help unlock private sector investment to build a stronger, more diversified and more resilient economy powered by renewable energy that creates secure, well‑paid jobs around the country."
The bill establishes two types of incentives including the hydrogen production tax incentive and the critical minerals production tax incentive.
The hydrogen production tax offset 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.
The critical minerals production tax incentive is a new form of refundable tax offset which will support the processing of critical minerals in Australia.
The government said that hydrogen and critical minerals are both essential to the world’s path to decarbonisation.
"The government sees them playing a central role in Australia’s net zero future and these tax incentives make that clear and ensures these projects are delivered in ways that provide broader benefits to local communities," Chalmers said.
Chalmers said the introduction of the legislation would provide the industry the clarity and certainty it needs to invest in Australian renewable hydrogen and critical minerals projects with confidence.
He noted that incentives would only be provided once projects were producing hydrogen or processing critical minerals used in products like wind turbines, solar panels and electric vehicles.
Recipients of the production tax incentives would also be required to deliver benefits relating to the six community benefit principles included in the overarching Future Made in Australia Bill.
The specific requirements would be detailed by rules set by the Treasurer, which would be subject to further consultation.
The Treasurer said the government recognises that the best opportunities for Australia and its people "lie at the intersection of industry, energy, resources, skills and Australia's ability to attract and deploy investment".
"These tax incentives will encourage and enable new industries that put us on a path to net zero and strengthen our economic resilience."
About the author
