Greens to Back New Tax Credits for Hydrogen, Critical Mineral Production

Australian Greens Leader Adam Bandt and Housing spokesperson Max Chandler-Mather speak to the media during a press conference at Parliament House in Canberra, Australia on Nov. 25, 2024. AAP Image/Lukas Coch

On the last day of Parliament for 2024, the Greens finally announced their support for the Future Made in Australia (Production Tax Credits and other Measures) Bill, which means it will likely have an easier path to being legislated.

Green Leader Adam Bandt said sectors like green hydrogen, critical minerals, and green steel would create jobs in regional Queensland and Western Australia, which are heavily dependent on coal and gas industries.

“And a lot of people around Australia are also asking, why aren’t we investing more in processing some of these minerals here, instead of just digging everything up and shipping it offshore? Why aren’t we investing more in processing here?” he said in Parliament on Nov. 28.

However, the Greens also raised several issues.

Bandt argued that the government’s approval of 28 new coal and gas projects undermined the bill’s objectives.

He said it would confuse voters regarding the government’s position on net zero.

What is the Law?

The bill aims to position Australia as a key player in the global transition to net-zero emissions. It introduces two tax incentives to promote renewable hydrogen production and critical minerals essential for decarbonisation.

The Hydrogen Production Tax Incentive offers $2 per kilogram for renewable hydrogen produced between 2027 and 2039, while the Critical Minerals Production Tax Incentive covers 10 percent of the processing costs for 31 minerals crucial to clean energy technologies, spanning the same period.

These incentives are designed to attract private investment, create well-paid jobs, and ensure local communities benefit from the projects.

The law also expands the role of Indigenous Business Australia, ensuring it affects Aboriginal communities.

Albanese Urges Parliament to Act

Prime Minister Anthony Albanese made a passionate appeal to Parliament to pass the bill, emphasising its vital role.

“These production tax credits are central to our government’s vision for a future made in Australia ... a future where manufacturing is as strong as mining,” he said.

Albanese stressed the importance of building Australia’s economic resilience, saying, “If you’re always the last link in the global supply chain, you will always be vulnerable.”

He warned that the nation’s dependence on international supply chains exposes it to unforeseen global disruptions.

However, Albanese criticised the opposition, accusing them of not supporting the bill without considering its benefits, such as generating jobs in regional areas in Queensland, Western Australia, and the Northern Territory.

“Parliament rises, those opposite have to go back to their communities and tell the people whose interests they are supposed to represent that they voted against them. They voted against new investment, new jobs, and new industry in the regions.”

Liberal MP Says Large-Scale Hydrogen Not Viable

Colin Boyce, a Liberal Party MP from central Queensland, opposed the measures saying they were unviable.

Boyce questioned the feasibility of the proposed Stanwell Corporation hydrogen plant in Gladstone, which aims to produce 800 tons of liquid hydrogen and 1,200 tons of gaseous hydrogen daily.

He pointed out that international companies such as Kansai Electric and Fortescue had withdrawn from similar projects, citing hydrogen’s high production and transportation costs.

Boyce further criticised the government’s plan to offer tax credits for hydrogen production, stating that even with subsidies, the economics of green hydrogen remain unsustainable.

He also expressed concerns about the lack of transparency regarding agreements with Indigenous groups, calling for greater accountability.

“It just simply doesn’t make economic sense, and that is why I and the Coalition do not support this bill,” he concluded.