In a significant move towards a greener future, the Australian Senate has passed crucial legislation paving the way for a hydrogen production tax incentive (HPTI).
The Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024, approved on February 10, 2025, establishes an HPTI worth $2 per kilogram of renewable hydrogen produced between 2027-2028 and 2039-2040, for up to ten years per project.
The Australian Hydrogen Council (AHC) has welcomed this development.
Dr Fiona Simon, CEO of the AHC, expressed enthusiasm about the bill’s passage, stating: “We are thrilled to see this critical legislation pass.
“Establishing a hydrogen production tax incentive keeps Australia in the race globally and provides greater certainty to investors while also setting us up to achieve the goals set out in our National Hydrogen Strategy.”
Dr Simon emphasised the crucial role of hydrogen in Australia’s energy future.
“There is no ‘do nothing option’ when it comes to hydrogen,” she said.
“We need it as a large-scale option for decarbonising energy that requires molecules.
“And we need it as a chemical solution to produce commodities like green iron.”
The legislation is expected to boost Australia’s position in the global hydrogen market and maintain its status as a trusted energy partner across Asia.
The AHC stated that it looks forward to collaborating with the Australian government to support the rollout of the hydrogen production tax incentive.
This new incentive, combined with the anticipated announcement of Hydrogen Headstart recipients, is expected to provide a significant boost for companies ready to invest in Australia’s hydrogen industry.
The move aligns with Australia’s broader strategy to decarbonise its industries and strengthen its economic resilience in the face of global net zero transformation.
As Australia continues to position itself at the forefront of the renewable energy sector, this legislation marks a crucial step towards achieving its National Hydrogen Strategy goals and securing a sustainable energy future.
