Australia to propose tax incentives for critical minerals
SYDNEY, Nov 25 (Reuters) -The Australian government on Monday will introduce legislation to implement production tax incentives for renewable hydrogen and critical minerals to help boost investment in the sector, which could play a major role in energy transition plans.
The proposed law will set up a tax incentive worth 10% of relevant processing and refining costs for 31 critical minerals from the fiscal year ending June 2028 to the 2039-40 fiscal year, for up to 10 years per project, the government said.
For renewable hydrogen, the planned legislation will establish a tax incentive worth A$2 ($1.31) per kilogram of renewable hydrogen produced during the same period.
"The legislation will give investors clarity and certainty to invest in Australia's potential to add more value to its natural resources, and help deliver cheaper and cleaner energy," Treasurer Jim Chalmers said in a statement.
The incentives will be provided once projects are up and running, producing hydrogen or processing critical minerals used in products like wind turbines, solar panels and electric cars, Chalmers said.
Major economies are seeking to invest billions to support clean energy projects and compete with China in manufacturing electric vehicles and semiconductors, seen as vital for prosperity and national security.
Australia's centre-left Labor government in its May budget pledged to introduce tax incentives worth A$7 billion for the processing and refining of critical minerals and A$6.7 billion for renewable hydrogen production from 2027/2028 to 2039/40.
($1 = 1.5314 Australian dollars)
Reporting by Renju Jose in Sydney; Editing by Leslie Adler
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