Greens support new tax incentives while questioning hydrogen viability

On November 28, 2024, the Greens announced their support for the Future Made in Australia (Production Tax Credits and Other Measures) Bill during the last day of Parliament for the year. This support is expected to facilitate the bill's passage, with Green Leader Adam Bandt highlighting that sectors such as green hydrogen, critical minerals, and green steel could generate employment opportunities in regional Queensland and Western Australia, regions historically reliant on coal and gas. Bandt raised concerns about the government approving 28 new coal and gas projects, which contradict the bill’s objectives aimed at transitioning toward renewable energy and sustainable practices. The proposed tax incentives include a Hydrogen Production Tax Incentive offering $2 per kilogram for renewable hydrogen from 2027 to 2039. Alongside this, a Critical Minerals Production Tax Incentive would cover 10% of processing costs for 31 essential minerals utilized in clean energy technologies during the same timeframe, aiming to attract private investments and bolster job creation. Albanese emphasized the significance of local manufacturing capabilities to safeguard Australia’s economy against international supply chain disruptions and dependencies, criticizing the opposition for not recognizing the merits of the proposed incentives for regional areas in Queensland, Western Australia, and the Northern Territory. However, not all members support the initiatives. Boyce, a regional MP, expressed doubts about the viability of large-scale hydrogen production, referencing the Stanwell Corporation's planned hydrogen plant in Gladstone, which intends to produce significant volumes of liquid and gaseous hydrogen. He pointed out that international firms like Kansai Electric and Fortescue had previously exited similar projects due to hydrogen's high production and transportation expenses. Boyce criticized the government's approach, arguing that despite potential subsidies, the economics surrounding green hydrogen remain unfavorable. He demanded improved transparency regarding agreements with Indigenous communities involved in such projects. Ultimately, Boyce and the Coalition do not support the bill, asserting it lacks economic sensibility and accountability. The legislative developments occurring in Australia reflect growing tensions between traditional fossil fuel interests and the push towards renewable energy. The ongoing dialogue illustrates the challenges of transitioning to sustainable economies, addressing both environmental concerns and economic viability, particularly in regions heavily dependent on mainstream energy sources.