Have your say on the Hydrogen Production Tax Incentive

The Australian Government is seeking public input on the design and implementation of the Hydrogen Production Tax Incentive, which was announced in the 2024–25 Budget.

Hydrogen key edit

A key component of Australian Government's Future Made in Australia plan, announced in the 2024-25 Budget, is the Hydrogen Production Tax Incentive (HPTI). Costing an estimated $6.7 billion over ten years, the HPTI is designed to support the production of renewable hydrogen from 2027–28 to 2039–40.

The HPTI is a temporary measure to accelerate the hydrogen industry’s growth by advancing project development, making renewable hydrogen available sooner and building scale to reduce production costs.

The Hydrogen Production Tax Incentive Consultation Paper is now available for review and response here. The consultation period ends on 12 July 2024.

Key Features:

  • Incentive Amount: $2 per kilogram of eligible hydrogen produced, provided as a refundable tax offset
  • Eligibility Period: Up to 10 years between 1 July 2027 and 30 June 2040
  • Flat Rate: The offset amount is not adjusted for inflation
  • Eligibility Criteria: Verification of hydrogen production volumes and emissions intensity through the Guarantee of Origin Scheme administered by the Clean Energy Regulator

Eligible Entities:

  • Corporations subject to Australian income tax (excluding entities fully exempt from corporate income tax)
  • Foreign investments subject to Australia’s foreign investment settings

Eligible Facilities:

  • Located in Australia
  • Meeting minimum capacity and emissions intensity thresholds
  • Final investment decision (FID) or production commencement by 30 June 2030
  • Registered with the Clean Energy Regulator using a GO production profile

Emissions Intensity Threshold:

  • Emissions intensity of ≤0.6 kg CO₂ equivalent per kilogram of hydrogen produced

Minimum Capacity:

  • Facilities must include a minimum capacity equivalent to a 10 MW electrolyser

Maximum Project Size/Output:

  • No restriction on the maximum size or amount of incentive claimed per facility

Eligible End Uses/Offtake:

  • All renewable hydrogen produced is eligible, including for domestic use or export and as an intermediate input into other products

Community Benefit Criteria:

  • Investment in local communities, including First Nations communities
  • Support for local supply chains, skill promotion, workforce diversity, and secure jobs
  • Transparency and compliance with tax obligations

To download the HPTI consultation paper, and for instructions on how and where to respond, go to the Australian Treasury website here.

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