Industry cheers hydrogen, critical minerals tax breaks
Critical minerals and green manufacturing were big winners in Tuesday’s budget, but policy experts warned rigorous selection frameworks were imperative to back the right companies.
Clean energy investors and policy experts have broadly welcomed the government's multi-billion dollar funding package for green hydrogen and critical minerals but warn rigorous frameworks must be in place to ensure public money is not wasted.
In an interview with Capital Brief on the eve of the budget, Prime Minister Anthony Albanese flagged green hydrogen and critical minerals as two areas of focus for new spending. Treasurer Jim Chalmers subsequently unveiled $7 billion in tax credits for critical minerals processing and $6.7 billion for green hydrogen production, in two of the biggest new measures announced on the night.
Both policy areas have been the subject of intense lobbying from industry groups agitating for the government to provide an Australian answer to the United States' Inflation Reduction Act. BHP warned Resources Minister Madeleine King in February it might not go ahead with the upgrade of its Kalgoorlie Nickel Smelter unless nickel was classified as a critical mineral and given production support.
Details of the $7 billion critical minerals production scheme were scant, but industry lobbyists said it would be available to processors of critical minerals — rather than the actual miners themselves — for a period of 10 years once they begin operating. The scheme will run until at least 2040 to allow new processing operations to get up and running.
