The Clean Energy Council welcomes the introduction of the Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024 into Federal Parliament this week.
Anna Freeman, Policy Director – Decarbonisation at the Clean Energy Council, said the Bill is a critical measure, and a catalyst, to unlocking hundreds of billions of dollars of private investment in new clean energy industries.
The Hydrogen Production Tax Credit will support early-mover, large-scale green hydrogen production in Australia, which will play an important role in the decarbonisation of our heavy industries and can stimulate massive economic expansion opportunities,Anna Freeman Policy Director – Decarbonisation
“There are many ‘hard-to-abate’ industries – like steel making, shipping and aviation – whose most promising prospects for decarbonisation depend on the availability of competitively priced hydrogen.
“With the best renewable energy resources in the developed world, Australia has a genuine shot at being an internationally competitive producer of green hydrogen and its derivatives,” she said.
Hard-to-abate transport sectors, in particular the maritime and aviation sectors, are looking to hydrogen as the basis for the production of new clean fuels. A number of the most promising and scalable renewable fuel options over the long term, like green ammonia for shipping and e-kerosene for aviation, depend on green hydrogen.
The global demand over the coming decades for these clean fuels is large and rapidly growing. The International Maritime Organisation’s target for 5-10 per cent of global shipping to use zero or near-zero emissions technologies, fuels or energy sources, could result in green hydrogen demand of as much as 7-14 million tonnes of per year by 2030.
“We have a rare opportunity to make a portion of these fuels here to help meet our own needs, reduce our dependency on fuel imports, and stimulate new local manufacturing opportunities. This will create jobs, increase our sovereign capability and enhance our energy security. It’s an opportunity we should not pass up,” Ms Freeman said.
“If we can produce competitively priced green hydrogen, we also shorten the odds of attracting major new investments over time in onshore iron processing, which would use green hydrogen to reduce the iron ore into iron metal.
“Converting iron ore to iron metal is an energy intensive process and accounts for roughly 80 per cent of the emissions in the steel-making process. By playing a larger role in the steel production supply chain, Australia can not only grow its manufacturing base, but help its Asian trading partners to decarbonise their steel manufacturing industries.
“Other major markets, including the United States and Canada, are providing generous support to hydrogen production, and Australia too needs to create attractive investment conditions if we are to attract the tens of billions of dollars of new private investment waiting in the wings.
“The production credit is a key element of our investment attraction strategy, and it should be complemented with demand-side policy measures to encourage uptake,” she said.
An important feature of the Bill is that tax credits are only granted to businesses who invest in, and produce green hydrogen here in Australia, and as such no support is given to investors who do not deliver.
“It’s critical that this Bill receives support from across the Parliament. Without it, we are actively choosing to pass up major economic development opportunities in new clean industries, jobs and improved energy security,” Ms Freeman said.
ENDS
For more information or to arrange an interview, contact:
Danielle Tricarico
Media Director, Clean Energy Council
+61 409 470 683