The federal government is putting a finger on the scale of Australia's net zero transition, spending billions to back hydrogen and critical minerals. But some experts say some clever design means the government isn't technically 'picking a winner'.
For a long time it was basically vague rhetoric that indicated the government wanted to support industries that would make things in Australia.
It argues both could be transformative for the Australian economy, and become globally-competitive sectors that create jobs and attract enormous investment from abroad. Green hydrogen is hydrogen made using renewable power only — essentially using electricity from renewables to split water into hydrogen and oxygen, and capturing the hydrogen to burn as fuel.The industry is still in its earliest days around the globe, but interest has been lifted significantly by generous tax credits on offer in the United States.
Once a company is actually producing green hydrogen, the government will offer them $2 per kilogram of hydrogen they produce.The government is sensitive to suggestions it is "picking winners", or gambling on the future of an industry that is as-yet unproven.Annabel Crabb: This year's budget offers a preview into the next decade of climate wars
Australia is already a major player in the critical minerals space — for example, it is already the largest producer of lithium in the world, and some of the world's largest deposits of nickel and cobalt.There is a security element to the issue — with countries like Australia and the US keen to diversify the global industry, rather than relying heavily on China.
"This is a proven mechanism that will reward those willing to take a risk in establishing new and costly industries, that if successful, will deliver a significant return on investment for Australia," he said. "Those projects should be able to stand alone and we support them, but not with taxpayers' money, splashing billions of dollars at a time when the government has created an economic crisis for families and a housing crisis for millions of Australians," he said.
"I want to work, so from what I've seen so far tax incentives are not going to provide you with new buyers in the critical minerals space.
Hydrogen Critical Minerals Production Tax Credits
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