The federal budget provides $8 billion over the next decade, including a major tax incentive, to accelerate investment in renewable hydrogen, earning it accolades from industry.
It’s part of government’s $22.7 billion Future Made in Australia package aimed at securing the nation’s place in the global economy, in part by supporting renewables.
“We know the global energy transformation represents a golden opportunity for Australia,” Treasurer Jim Chalmers said as he handed down the Budget on Tuesday night.
“The Future Made in Australia package will realise Australia’s potential to become a renewable energy superpower.”
Initiatives include a $6.7 billion tax incentive for the production of renewable hydrogen over the next decade.
“The Hydrogen Production Tax Incentive will make Australia’s pipeline of hydrogen projects commercial sooner, ” budget papers say.
Supporting skills, innovation, investment
The Hydrogen Headstart program will also be extended for ten years with a $1.3 billion commitment, supporting investment in the industry’s development.
The Budget also provides $17.1 million to deliver the 2024 National Hydrogen Strategy, including hydrogen infrastructure planning, social license and industry safety training and regulation, and $32.2 million to fast-track the initial phase of the Guarantee of Origin scheme, focused on renewable hydrogen.
There’s $10 million to establish a National Hydrogen Technology Skills Training Centre to promote hydrogen workforce development in partnership with the Victorian Government.
In an attempt to capitalise on the economic and industrial benefits of the energy transition the budget establishes a $1.7 billion Future Made in Australia Innovation Fund to be administered by the Australian Renewable Energy Agency ARENA.
The fund will “support innovation, commercialisation, pilot and demonstration projects and early stage development in priority sectors, including renewable hydrogen and green metals,” budget papers say.
Industry welcomes funding
Unsurprisingly, the government’s ‘bold vision’ for hydrogen has been welcomed by the Australian Hydrogen Council.
“The extension of the Hydrogen Headstart program is critical for early mover hydrogen projects and the $6.7 billion Hydrogen Production Tax Incentive over the next decade for renewable hydrogen produced from 2027 will also help give these early projects certainty as they reach financial investment decisions,” CEO Dr Fiona Simon said in statement.
The measures found another fan in Fortescue executive chairman Andrew ‘Twiggy’ Forrest.
Mr Forrest said the hydrogen production tax credit was crucial to getting green hydrogen projects off the ground fast and at a scale to build a major market.
“The government has sent a clear message – business-as-usual for the fossil fuel monopoly driving up the cost of living and trashing our environment is over,” he said.
“This incentive will fast-track the development of a green iron industry in Australia. Fortescue believes that commercial production of green iron in Australia is now possible and must be pursued.”
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