The Future Made in Australia plan is moving forward with new incentives for green hydrogen. A recently approved law will provide $2 AUD per kilogram of renewable hydrogen produced in the country, alongside a 10% tax credit for the refining and processing of critical minerals. These financial incentives, set to take effect on July 27, 2027, aim to support domestic industries and attract international investments.
The Critical Minerals Production Tax Incentive (CMPTI) was officially passed by the Australian Senate on February 10, 2025. This marks a significant step in Australia’s strategy to strengthen domestic production while capitalizing on shifting global policies. The move comes as the United States faces uncertainty following President Donald Trump’s decision to suspend payments under the Inflation Reduction Act (IRA).
A closer look at Australia’s new incentives
Green hydrogen subsidies
The legislation introduces temporary financial support for green hydrogen produced via renewable-powered electrolysis. The incentive, available only to Australian-based companies meeting specific criteria, will provide $2 AUD ($1.26 USD) per kilogram of renewable hydrogen produced. This subsidy will be available for up to ten years, from July 1, 2027, to June 30, 2040, but only for projects that reach final investment decisions (FID) by 2030.
Critical minerals tax credit
Starting July 1, 2027, the 10% tax credit will apply to companies engaged in the processing and refining of 31 critical minerals currently listed by the Australian government. This tax relief will remain in place for up to ten years, until June 30, 2040.
Industry response and investment outlook
The Association of Mining and Exploration Companies (AMEC) welcomed the new incentives.
“The Critical Minerals Production Tax Incentive is a strategic tool that lays the foundation for Australia’s Future Made in Australia ambitions. It also represents the largest commitment ever made by an Australian government toward critical minerals,” said Warren Pearce, CEO of AMEC.
Pearce emphasized that the policy could unlock billions in new investments for the critical minerals industry. “This incentive sends a clear message to global investors: if you come to Australia, your costs will be lower because this guarantee is written into law. While other doors may be closing, Australia’s remain wide open,” he added.
With these measures, Australia is positioning itself as a key global player in the green hydrogen and critical minerals markets, offering strong incentives for companies looking to invest in the clean energy transition.