Australia Props Up Key Transition Industries With Tax Breaks

Australia Props Up Key Transition Industries With Tax Breaks | OilPrice.com

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Breaking News:

ByIrina Slav– Feb 11, 2025, 12:44 AM CST

Australia’s government plans to introduce tax breaks for businesses active in the production of green hydrogen and critical mineral miners and processors in order to stimulate growth in these industries.

Proposed by the government of Anthony Albanese, the incentive bill passed the Senate earlier this week and should pass the lower chamber of Australia’s parliament today. The incentive law would come into effect from 2027, Bloomberg said in a report on the news.

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The incentives include A$2 ($1.25) per kilogram of green hydrogen produced between 2027 and 2028 and between 2039 and 2040 for up to ten years per project, the country’s resource ministry said in a news release.

For critical minerals, the tax break would come in at 10% of “relevant processing and refining costs” for the 31 minerals the Australian government has identified as critical, the ministry also said. Those would be in effect for the same period as the green hydrogen tax break.

A key detail about eligibility for the tax breaks is the fact that a project must be up and running to qualify for them. In other words, companies must secure the upfront investment in green hydrogen production or critical mineral processing before they become eligible for the new incentives.

“It sends a clear signal that the Australian government is really serious about developing a critical minerals network, and we’re taking up our global responsibility to act on rare earths,” Resource Minister Madeleine King said of the bill.

Australia has substantial natural resources, including minerals essential for a transition from a hydrocarbon-based economy to one dependent on alternative energy sources such as wind and solar, along with electric transport and hydrogen.

The Albanese government has been quite active in the transition field, approving a total of 70 wind and solar projects with a view of turning Australia into “a renewable energy superpower”—a rhetoric also enthusiastically used by the Keir Starmer government in the UK.

By Irina Slav for Oilprice.com

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