Hydrogen Production Tax Incentive

Policy Engagement Overview

InfluenceMap analysis indicates that engagement on the consultation and inquiry has been overall unsupportive of the proposed HPTI. A total of 21 companies and industry associations in InfluenceMap’s database submitted a response to the consultation. Of the respondents in the first consultation (20), 5 (25%) engaged positively and 8 (40%) engaged negatively. The other 7 respondents (35%) engaged with mixed or unclear positions on the policy. Of the respondents to the inquiry (8), 4 (50%) engaged positively on the HPTI, 3 (37.5%) engaged negatively, and the other 1 (12.5%) respondent held a mixed position on the policy. 3 entities appeared to drop their unsupportive positions when it came to the inquiry.

Policy Engagement Trends

• Support for the incentive was led by the energy sector, including Smart Energy Council, Clean Energy Council, Iberdrola, and Siemens Energy. All these entities supported the proposed emissions intensity threshold. Smart Energy Council, and Iberdrola also supported the requirement for grid-connected electrolyzer project’s production to be from the same grid. This position was also supported by Fortescue. The Clean Energy Council also supported additionality and time-matching requirements.

• Opposition to the incentive was led by the fossil fuel sector, including APA Group, Chevron and Woodside. All these entities advocated for increasing the emissions’ intensity threshold. Chevron, and Woodside also advocated for the eligibility of hydrogen produced from fossil fuels. This position was also advocated for by Chevron and APA Groups industry association the Chamber of Minerals and Energy of Western Australia (CME) which is a much more negative position than some of its other members including Fortescue and BP.

• Three entities appeared to drop their unsupportive positions when it came to the inquiry. APA Group, Australian Hydrogen Council and BP all took positive positions in the inquiry where they were previously negative or unclear. One entity, the Australian Pipelines and Gas Association (APGA), appeared to take a more mixed position where it was previously negative. However, the Chamber of Minerals and Energy of Western Australia (CME) appeared to take a more negative stance than before, appearing to call for a higher emissions intensity threshold and advocating for extending the 2030 FID and 2040 incentive cut-off dates. This position does not appear to represent the new positions from some of its members, including APA, BP, and Fortescue.

Impacts on Policy Ambition

The tax credits passed the Senate in February 2025 with no changes to the tax offset amount of $2 per kilogram of eligible hydrogen. The final Act also retained the proposed emissions intensity as well as grid matching requirements and did not propose any restriction on end-use.