The Australian Taxation Office (ATO) published a release on the proposed Hydrogen Production and Critical Minerals Tax Incentives on Tuesday, 14 May, 2024, as part of the 2024-25 Budget.
The initiative is designed to accelerate investment in Future Made in Australia priority industries, and is consistent with the Government’s Critical Minerals Strategy and Renewable Energy Superpower Plan.
Hydrogen production tax incentive
The Government will establish a temporary Hydrogen Production Tax Incentive to encourage renewable hydrogen production for eligible Australian resident corporations with a time-limited and uncapped refundable tax offset.
It will be available for hydrogen production for a maximum of 10 years, between 1 July, 2027, and 30 June, 2040, for projects that reach final investment decisions by 2030.
The incentive amount will be informed by consultation prior to implementation.
Critical minerals production tax incentive
From 1 July, 2027, the Government will establish a temporary Critical Minerals Production Tax Incentive.The incentive will provide eligible recipients with a refundable tax offset of 10% for the costs of processing the 31 critical minerals currently listed in Australia.
The credit will be available for a maximum of 10 years between 1 July, 2027, and 30 June, 2040.
Eligible processing costs will be informed by consultation.
