About the incentive
In the 2024–25 Budget, the Australian Government announced its Future Made in AustraliaOpens in a new window package. This package supports Australia's transition to a net zero economy.
The Future Made in Australia package includes a temporary Hydrogen Production Tax Incentive (HPTI). This is to support the production of renewable hydrogen in Australia. The HPTI will help companies commence medium to large scale production of renewable hydrogen in Australia, while the market is still developing.
The HPTI is a refundable tax offset of $2 per kilogram of eligible hydrogen produced by eligible companies. It applies to hydrogen produced in income years between 1 July 2027 and 30 June 2040, for a maximum of 10 years.
Administration
The ATO and Clean Energy Regulator (CER) jointly administer the HPTI:
- We administer the HPTI tax offset claimed in your company tax return.
- CER administers the Future Made in Australia (Guarantee of Origin) Act 2024 (GO SchemeOpens in a new window). They will verify the details of your eligible hydrogen production.
Eligibility
Both your company claiming the offset and the hydrogen must satisfy the eligibility criteria for the HPTI.
Eligible companies
To be an eligible company for the HPTI, you must:
- be either
- an Australian resident company that has an ABN
- a foreign resident company that has a permanent establishment in Australia and an ABN
- hold a production profile certified by the CER under the GO Scheme while producing the hydrogen
- be subject to Australian tax for any income from your hydrogen producing activities
- comply with the rules implementing the community benefit principles for the HPTI.
Entities that are not corporations, such as trusts or partnerships, are not entitled to the HPTI.
Eligible hydrogen
To be eligible hydrogen for the HPTI, it must be:
- renewable hydrogen produced in Australia
- on or after 1 July 2027, and
- before 1 July 2040 (the HPTI period)
- produced under a production profile certified by the CER
- subject of a registered Product Guarantee of Origin certificate (PGO certificate) under the GO Scheme, which
- identifies the facility producing the hydrogen
- indicates the production emission intensity of the hydrogen did not exceed 0.6 kg of carbon dioxide for each kilogram of hydrogen
- indicates that if electricity used was from a grid, it satisfies the grid matching requirements.
What you can claim
You can claim a refundable tax offset of $2 per kilogram of eligible hydrogen produced.
How to claim
You claim the HPTI tax offset in the company tax return for the income year.
When to claim
You can claim the HPTI tax offset for income years that:
- start on or after 1 July 2027, and
- end on or before 30 June 2040.
The offset period for each facility and production pathway is up to 10 years.