Melbourne, Australia: Australian Hydrogen Council (AHC) CEO Dr Fiona Simon today called on the Senate Standing Committee on Economics to support the urgent passage of critical legislation to establish a hydrogen production tax incentive (HPTI) in Australia.
The Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024 was introduced into Federal Parliament on 25 November, and aims to establish a HPTI worth $2 per kilogram of renewable hydrogen produced between 2027-2028 and 2039-2040 for up to ten years per project.
The bill is now subject to an inquiry by the Senate Standing Committee on Economics, with a report due on 30 January 2025.
Appearing at a public hearing today, Fiona reinforced AHC’s strong support for the bill:
“We have an enormous opportunity in this country to create a vibrant hydrogen industry, both for domestic and export use.
“While many applications for molecules will shift to electrons as electrification emerges as the most efficient option for continued operations, there is still a significant portion of industrial activity that will not be covered. And hydrogen is the only large-scale option for decarbonising energy that requires molecules.
“Importantly, hydrogen also provides a chemical solution to decarbonisation – such as for producing green iron – that electricity does not. Australia is also a trusted energy partner across Asia and the export of molecules is critical to Australia’s ongoing prosperity.
“The HPTI signals to Australian investors and the rest of the world that Australia is serious in attracting project investment, and the technology, capability and workforce opportunities that come with it.
“Not enacting this legislation before the Federal election will bring uncertainty as the rest of the world keeps moving ahead and investors are looking to invest.
“To avoid doubt, I should point out that nuclear energy is about making electrons, not molecules. Nuclear and hydrogen do not compete.
“Even if we are not ambitious about new growth opportunities, such as with exports, we need to recognise that if Australia cannot provide a path for facilities to decarbonise, we will lose the heavy industries we have. These industries still need to make things to sell in a global market that values carbon, and they will shift to where the best opportunities are to do this.
“We are extremely supportive of the suite of Australian Government policy developments that impact the hydrogen industry. Beyond the Future Made in Australia package and the Hydrogen Production Tax Incentive, these include Hydrogen Headstart, the revised National Hydrogen Strategy, and other enabling initiatives such as the Capacity Investment Scheme, the National Reconstruction Fund, sustainable finance policy, and the carbon leakage review.
“We need to stay the course and recognise there is no ‘do nothing’ option.”
The Senate Standing Committee on Economics report is due on 30 January 2025. To view the Australian Hydrogen Council’s formal submission, click here.
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About Australian Hydrogen Council
The Australian Hydrogen Council is the peak representative body for the Australian hydrogen industry, with members from across the hydrogen value chain. We represent the emerging hydrogen industry and connect it with its stakeholders to collectively create a clean and resilient energy future that has hydrogen as a key part of the energy mix.
You can download the full PDF here.