The Australian Taxation Office has updated its guidance on the application of the Hydrogen Production Tax Incentive, which provides a refundable tax offset of AUD 2 per kilogram for eligible renewable hydrogen produced by qualifying companies.
The Australian Taxation Office (ATO) announced on 10 September 2026 that it updated the web guidance to help eligible companies understand the steps required to apply for the Hydrogen Production Tax Incentive (HPTI).
The Australian Government has established the Hydrogen Production Tax Incentive (HPTI) as part of its Future Made in Australia package, a policy framework designed to accelerate the country’s transition to net zero. The incentive offers a refundable tax offset of AUD 2 per kilogram of eligible renewable hydrogen produced by qualifying companies.
How the incentive works
The HPTI applies to hydrogen production between 1 July 2027 and 30 June 2040, with each facility eligible to claim the offset for a maximum 10-year period. The Clean Energy Regulator (CER) and the Australian Taxation Office (ATO) jointly administer the scheme. Companies must obtain CER certification and registration before lodging claims through their tax returns.
Company and production requirements
To qualify, companies must be either Australian resident corporations with an ABN or foreign resident companies with an Australian permanent establishment and ABN. They must hold a CER-certified production profile during hydrogen production, remain subject to Australian tax on hydrogen-related income, and reach their final investment decision before 1 July 2030 for facilities approved from that date onward. Trusts and partnerships cannot access the offset.
The hydrogen itself must meet specific standards: production capacity must equal at least a 10-megawatt electrolyser nameplate capacity, facilities must be operational within Australia by the deadline, and production pathways cannot involve coal gasification or steam reformation of natural gas.
Each kilogram of hydrogen must not exceed 0.6 kilograms of carbon dioxide equivalent in production emissions, verified through a Product Guarantee of Origin certificate under the GO Scheme. Grid-sourced electricity must satisfy designated grid matching requirements.
Producers planning to claim the HPTI should review eligibility criteria and engage with the CER early to ensure compliance before lodging their claims.
