Australia will introduce the Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024 to the parliament, designed to implement the production tax incentives for renewable hydrogen and expand the role and remit of indigenous business, Minister for Climate Change and Energy Chris Bowen said Nov. 25.

The legislation establishes a Hydrogen Production Tax Incentive worth A$2/kg ($1.30/kg) of renewable hydrogen produced between 2027-28 and 2039-40 for up to 10 years per project, the minister said, in line with the incentive announced in the budget for 2024-25 (July-June) in May.

"This is all about seizing the vast economic and industrial opportunities from the global net zero transformation and strengthening our economic resilience," Bowen said. "This Bill will help unlock private sector investment to build a stronger, more diversified and more resilient economy powered by renewable energy."

Under the Bill, the incentives will only be provided once projects are up and running, producing hydrogen or processing critical minerals used in products like wind turbines, solar panels and electric vehicles, Bowen said.

The specific requirements under the bill will be detailed by rules set by the Treasurer, which will be subject to further consultation, he added.

"These tax incentives will encourage and enable new industries that put us on a path to net zero and strengthen our economic resilience," he said.

The legislation will provide the industry with the clarity and certainty it needs to invest in Australian renewable hydrogen and critical minerals projects with confidence, Bowen added.

Meanwhile, results are expected from Australia's A$2 billion Hydrogen Headstart incentive plan that shortlisted six hydrogen developers in December 2023. These companies include BP Low Carbon Australia's H2Kwinana project in Western Australia and Stanwell's CQ-H2 project in Queensland.

S&P Global's Hydrogen Production Assets database shows Australia has around 180 renewable or low-carbon hydrogen projects with a combined projected capacity of around 16.97 million mt.

Platts, part of S&P Global Commodity Insights, assessed Queensland hydrogen produced via alkaline electrolysis (including capex) at $6.76/kg Nov. 21, up 53% month on month.

Japan hydrogen produced via alkaline electrolysis (including capex) was assessed at $5.78/kg Nov. 22, nearly the same as a month ago.