Australia: Green hydrogen and critical minerals production tax incentives announced in 2024 federal budget
Proposed tax incentives and funding for green energy and critical minerals processing projects
The 2024 federal budget announced—released 14 May 2024 (read TaxNewsFlash)—proposed tax incentives and funding for green energy and critical minerals processing projects.
The “Future Made in Australia” package includes AU$19.7 billion over 10 years to support investment in renewable hydrogen, green metals, low carbon fuels, critical minerals and clean energy manufacturing.
Major tax credits include:
- The hydrogen production tax incentive, which would provide a AU$2 incentive per kilogram of renewable hydrogen produced for up to 10 years per project, between 2027-28 and 2039-40, and would operate alongside the expanded hydrogen headstart program (which is also extended by AU$1.3 billion over the next 10 years)
- The critical minerals production tax incentive, which would provide a production incentive at 10% of relevant processing and refining costs for Australia’s 31 critical minerals for up to 10 years per project between 2027–2028 and 2039–2040
The budget also provides significant funding for the Australian Renewable Energy Agency and initiatives like the “solar sunshot” program and the “battery breakthrough” initiative. Additional funds are allocated for environmental approvals, community engagement, the ACCU Scheme, and the Net Zero Economy Authority. The budget also addresses vocational education and training sector trainer workforce shortages, greenwashing, and the development of a sustainable finance sector. It also provides funding for the “nature positive” agenda and circular economy policy.
For more information, contact a KPMG professional in Australia:
Adrian King | avking@kpmg.com.au
Barry Sterland | bsterland@kpmg.com.au