Australia passes tax incentives to boost domestic industry, reduce reliance on China

Australia has enacted new legislation introducing tax incentives for critical mineral processing and renewable hydrogen production, aiming to strengthen domestic industries and reduce reliance on China, ChemAnalyst reported.

The law establishes a 10% production tax break for processing 31 critical minerals from 2028 to 2040, with projects eligible for up to 10 years of support. Additionally, a A$2 ($1.26) per kilogram tax incentive will encourage renewable hydrogen production.

Resources Minister Madeleine King emphasized the initiative’s role in job creation and diversifying global supply chains. The government has allocated A$7 billion for critical minerals and A$6.7 billion for renewable hydrogen in the May budget.

While the legislation received broad support, the Liberal-National coalition opposed it, citing bureaucratic and environmental hurdles. Proposed amendments to ease regulations were blocked by the Labor government and the Greens.