Hydrogen production tax credits pass the Australian Senate

$2 per kg subsidy available for up to 10 years for each selected project

Click to learn more. The Australian government has established the Hydrogen Production Tax Incentive. Source: Department of Climate Change, Energy, the Environment and Water.

Newly-passed legislation has established two tax incentives for decarbonised commodities in Australia:

1. Hydrogen Production Tax Incentive – worth AU$2 per kg of renewable hydrogen produced between 2027-2028 and 2039-40, for up to ten years per project.
2. Critical Minerals Production Tax Incentive – worth ten per cent of relevant processing and refining costs for Australia’s 31 critical minerals, for critical minerals processed and refined between 2027-28 and 2039-40, for up to ten years per project.

Under development for several years, the tax incentive is expected to support first-mover Australian projects reach FID and operations. The first recipients of commercial gap funding via the Hydrogen Headstart program are also expected to be announced soon.

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…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.

Fiona Simon, Australian Hydrogen Council CEO in her organisation’s official press release, 11 Feb 2025

Incentives such as this demonstrate a strong commitment to building a sustainable future and to diversifying our economy. It will enable projects like AREH and WGEH to deliver on their promise of creating jobs, driving investment, and decarbonising industries at scale.

InterContinental head of Australia Isaac Hinton, in his organisation’s official press release, 11 Feb 2025

The passing of the Hydrogen Production Tax Incentive is a critical step in driving investment in green hydrogen…This forward-thinking policy, alongside the Albanese Government’s strong strategic focus and previously announced support for the aluminium sector, will also be integral to driving decarbonisation to enable industry to achieve real zero.

Fortescue Metals Chief Executive Dino Otranto, in InterContinental Energy’s official press release, 11 Feb 2025