The Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024 was introduced to the House of Representatives on 25 November 2024.
Wedoany.com Report-Feb 12, The Australian Senate has passed the Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024.
This move will bolster investment in the nation’s critical minerals sector, which is essential for various high-tech and green industries.
The bill was introduced to the House of Representatives on 25 November 2024. It establishes two tax incentives: the Critical Minerals Production Tax Incentive (CMPTI) and the Hydrogen Production Tax Incentive.
The CMPTI legislation aims to stimulate investment by allowing eligible entities to claim a 10% expenditure credit for processing and refining Australia’s 31 critical minerals. The incentive period spans from the 2027–28 to 2039–40 financial years, offering support for up to ten years per project.
The incentives will be provided to projects that are operational, focusing on the processing of critical minerals used in renewable energy technologies, such as wind turbines and solar panels, as well as electric vehicles.
These minerals are also crucial for defence applications including submarine and aircraft construction.
The Hydrogen Production Tax Incentive offers A$2 ($1.26) for every kilogram of renewable hydrogen produced, also available for up to ten years per project.
Currently, there are 118 critical minerals projects and 69 hydrogen projects in the development pipeline.
Prime Minister of Australia Anthony Albanese mentioned on social media: “We can build a future for Australia with thriving industries through measures like Free TAFE, the National Reconstruction Fund and Production Tax Credits.”
The Australian Council of Trade Unions (ACTU) highlighted the potential for job creation following the bill’s passage, noting that industries such as green aluminium, solar and battery manufacturing, green hydrogen and critical minerals could generate more than 400,000 new jobs by 2040.
ACTU president Michele O’Neil said: “This Bill will help create hundreds of thousands more jobs with community benefits conditions ensuring the jobs created are secure and well-paid. With these production incentives, job numbers will skyrocket to a far larger scale by 2040.”
The Association of Mining and Exploration Companies (AMEC), in collaboration with its member companies, commissioned a report by Mandala Partners, which helped to develop these tax incentives for the critical minerals sector.
AMEC CEO Warren Pearce said: “The CMPTI is a powerful strategic lever that provides the foundation for the Future Made in Australia ambitions of the country. It is also the largest-ever commitment from an Australian Government to critical minerals. This will stimulate billions in new investment in critical minerals processing, which will be far more valuable than the incentives on offer.”
The Chamber of Minerals and Energy WA welcomed the bill, with CEO Rebecca Tomkinson stating that the newly legislated production tax incentives would enable Australia to build on its upstream mining strengths and move further down the value chain.
“Offering production tax incentives for hydrogen production and critical mineral processing sends a clear message to investors that Australia is serious about seizing the opportunities presented by the global energy transition,” added Tomkinson.
