Hydrogen Production Tax Incentive

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Hydrogen Production Tax Incentive

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Hydrogen Production Tax Incentive?

Hydrogen Production Tax Incentive provides up to $2 per kilogram for Australian corporations producing renewable hydrogen with low emissions intensity.

Background

Hydrogen Production Tax Incentive is part of the government’s broader agenda to make Australia a renewable energy superpower. This incentive aims to attract investment, enhance economic security, and support local communities by promoting the production of renewable hydrogen. Renewable hydrogen is essential for Australia’s transition to a net zero economy, leveraging our abundant renewable resources to produce green hydrogen at competitive prices.

Objectives

The objectives of the Hydrogen Production Tax Incentive are to:

• Accelerate the development of Australia’s hydrogen industry.
• Make renewable hydrogen available sooner and at a larger scale.
• Reduce production costs of renewable hydrogen over time.
• Support Australia’s transition to a net zero economy.

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Focus Areas

The Hydrogen Production Tax Incentive will target several high-value strategic opportunities to propel Australia to the forefront of the global hydrogen industry:

• Renewable Hydrogen Production – Establishing and expanding facilities that produce hydrogen using renewable energy sources such as solar, wind, and hydroelectric power. This focus area aims to leverage Australia’s abundant renewable resources to produce green hydrogen, reducing carbon emissions and supporting a sustainable energy future.
• Industrial Decarbonisation – Utilising renewable hydrogen in high-temperature industrial processes such as steel and cement production. This initiative aims to replace traditional carbon-intensive methods with clean hydrogen solutions.
• Transport Sector Transformation – Developing infrastructure for hydrogen refuelling stations and supporting the adoption of hydrogen-powered vehicles, including cars, buses, and heavy trucks. This focus area will promote the use of hydrogen as a clean fuel alternative in the transport sector.
• Research and Innovation – Investing in research and development to improve hydrogen production, storage, and utilisation technologies. This initiative will support innovation in electrolysis, fuel cells, and hydrogen storage solutions.
• Community and Economic Benefits – Ensuring that hydrogen production projects benefit local communities by creating jobs, supporting local economies, and promoting environmental sustainability. This focus area will include initiatives to engage and benefit First Nations communities.

Sample Projects

Here are some examples of projects that could benefit from the Hydrogen Production Tax Incentive:

• Development of a Large-Scale Renewable Hydrogen Production Facility Using Solar-Powered Electrolysis – Establishing a new hydrogen production facility that uses solar energy to power the electrolysis process. This project focuses on harnessing abundant solar resources to produce green hydrogen, which can be used in various industries. The facility will feature advanced solar panels and electrolysers to ensure efficient and sustainable hydrogen production.
• Implementation of a Green Hydrogen Production System in an Existing Industrial Plant to Replace Natural Gas – Converting an existing industrial plant to use green hydrogen instead of natural gas for its energy needs. This project involves retrofitting the plant with hydrogen-compatible infrastructure and integrating hydrogen production systems. The goal is to reduce carbon emissions and promote cleaner industrial processes.
• Establishment of a New Hydrogen Fuel Cell Manufacturing Unit Aimed at Producing Low-Emission Hydrogen Fuel Cells – Setting up a manufacturing unit dedicated to producing hydrogen fuel cells. These fuel cells can be used in various applications, including transportation and stationary power generation. The project focuses on developing low-emission fuel cells that contribute to reducing the overall carbon footprint.
• Integration of Wind-Powered Hydrogen Production in a Rural Community to Support Local Energy Needs – Developing a hydrogen production facility in a rural area that uses wind energy to generate hydrogen. This project aims to provide a reliable and sustainable energy source for the community, reducing reliance on traditional fossil fuels and promoting local energy independence.
• Construction of a Pilot Plant for the Production of Hydrogen from Biomass with Low Emissions Intensity – Building a pilot plant that produces hydrogen from biomass, such as agricultural waste or forestry residues. This project focuses on demonstrating the viability of biomass as a feedstock for hydrogen production, with an emphasis on low emissions intensity and sustainability.
• Expansion of a Hydrogen Production Facility to Include Advanced Purification and Storage Systems – Enhancing an existing hydrogen production facility by adding advanced purification and storage technologies. This project aims to improve the quality and storage capabilities of hydrogen, making it more accessible for various applications and increasing the efficiency of the overall production process.
• Conversion of a Traditional Ammonia Production Plant to Utilise Green Hydrogen as a Feedstock – Modifying an existing ammonia production plant to use green hydrogen as a feedstock instead of natural gas. This project focuses on reducing the carbon footprint of ammonia production, which is widely used in agriculture and industrial applications, by integrating sustainable hydrogen sources.
• Development of an Offshore Renewable Hydrogen Production Platform Utilising Ocean-Based Wind Farms – Creating an offshore platform that uses wind energy generated by ocean-based wind farms to produce hydrogen. This project leverages the strong and consistent winds over the ocean to generate renewable hydrogen, which can be transported to the mainland for various uses.
• Installation of Hydrogen Refuelling Stations Across Multiple Locations to Support the Adoption of Hydrogen-Powered Vehicles – Establishing a network of hydrogen refuelling stations to promote the use of hydrogen-powered vehicles. This project aims to build the necessary infrastructure to support the growing market for hydrogen fuel cell vehicles, enhancing convenience and accessibility for users.
• Research and Development Project Focused on Improving the Efficiency of Electrolysis Technology for Hydrogen Production  – Conducting research and development to advance electrolysis technology, which is crucial for efficient hydrogen production. This project aims to improve the efficiency, cost-effectiveness, and scalability of electrolysis systems, making hydrogen production more viable and widespread.

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Eligible Entities

Applicants for the Hydrogen Production Tax Incentive must meet the following criteria:

• Be a corporation subject to Australian income tax.
• Foreign investment will be subject to Australia’s foreign investment settings.
• Have made a final investment decision on or before 30 June 2030 for each eligible facility.

Eligible Expenditure

The eligible expenditure for the Hydrogen Production Tax Incentive includes:

• Production of renewable hydrogen at facilities meeting minimum capacity and emissions intensity thresholds.
• Costs associated with registering production profiles and verifying emissions through the Guarantee of Origin Scheme.

Funding

Eligible corporations can receive $2 per kilogram of renewable hydrogen produced, with no cap on the total amount claimed. The incentive is available for a maximum of 10 years from the first eligible production between 2027-28 and 2039-40. No additional incentive is provided for meeting community benefit criteria or emissions intensity thresholds.

Eligible Activities

Eligible expenditure for the Hydrogen Production Tax Incentive includes:

• Production of renewable hydrogen using electrolysis or other eligible methods.
• Activities ensuring compliance with emissions intensity and capacity requirements.
• Registration and verification processes through the Guarantee of Origin Scheme.

Learn more about the application

process for the Hydrogen Production Tax Incentive;

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How to get the Hydrogen Production Tax Incentive

In order to get the Future Made in Australia – Hydrogen Production Tax Incentive, you will need to focus on:

• Summarise your hydrogen project, focusing on the problem it solves, the demand for hydrogen, and your unique solution.
• Clarify how your project fits the criteria, including funding details and environmental benefits.
• Compile all received funding, including investments and grants, to provide a full financial overview.
• Craft a succinct project pitch highlighting your next year’s goals and potential obstacles.
• List key team members, including founders and employees, to showcase your team’s depth of expertise and commitment.
• Include up to three CVs for your project’s key figures, such as the founding team and CEO, highlighting their qualifications and relevance.
• Show your engagement in high-quality renewable energy programs, demonstrating your active participation in the ecosystem.
• Demonstrate business traction with details on hydrogen production development, trial statuses, revenue, and customer base.
• Outline your 12-month growth strategy, focusing on acquiring new clients, entering new markets, boosting revenue, or securing more investment.
• Explain the grant’s necessity and the challenges it will help you overcome, alongside a detailed budget showing how the grant and matched funding will be used for eligible activities and the expected outcomes.

   

Timing

The closing date for the Hydrogen Production Tax Incentive applications is 30 June 2030.

More Information

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Partner with Bulletpoint for Your Hydrogen Production Tax Incentive

With over a decade of expertise in securing grants for clients and holding the title of Australia’s highest-rated government grant consultant, Bulletpoint is your ideal partner for the Hydrogen Production Tax Incentive. We understand what types of projects the government is eager to fund and know precisely how to position your project for maximum appeal.

Our team excels in identifying the key elements that make a proposal stand out, ensuring your hydrogen production project aligns with the government’s objectives. We’ll guide you on which key collaborators to involve, strengthening your proposal and increasing your chances of securing substantial funding

Get Started with Bulletpoint to Power Your Hydrogen Innovation

Book a consultation through Calendly, call us at 1300 658 508, or send a message here to discuss your project. Let’s turn your vision into a funded reality.