The Federal Government has unveiled its Budget 2024–25 with funding for hydrogen and renewable energy development, as well as consumer energy rebates, taking top priority.
Key energy deliverables in the Budget 2024–25 include the Future Made in Australia package targeting renewable energy production and cost-of-living relief in the form of energy bill rebates.
Hydrogen is also a major focus, with funding for several hydrogen initiatives including a hydrogen production tax incentive and expansion of the Australian Renewable Energy Agency’s (ARENA) Hydrogen Headstart program.
Future Made in Australia
The Federal Government said its $22.7 billion Future Made in Australia package is designed to create new jobs and opportunities by maximising the economic and industrial benefits of the move to net zero, and to help facilitate the private sector investment required for Australia to become an indispensable part of the global economy.
The Future Made in Australia package is expected to establish time‑limited incentives to invest in new industries. The Hydrogen Production Tax Incentive is hoped to help make Australia’s pipeline of hydrogen projects become commercial sooner, at an estimated cost of $6.7 billion over the decade. The Budget will also expand the Hydrogen Headstart program by $1.3 billion.
The Federal Government also said it hopes to unlock more than $65 billion of investment in renewable capacity by 2030 through the Capacity Investment Scheme.
Key details of the Future Made in Australia package include:
- $7 billion production tax incentive for the processing and refining of critical minerals
- $6.7 billion production tax incentive for the production of renewable hydrogen
- $1.7 billion to promote net zero innovation, including for green metals and low-carbon fuels
- $1.5 billion to strengthen battery and solar panel supply chains through production incentives
- $1.1 billion to reform higher education and deliver a skilled workforce
- $566 million to map Australia’s geological potential to support net zero transition
- $519.1 million from the Future Drought Fund for farmers and rural communities
- $448.7 million for advanced satellite data on climate, agriculture, and natural disasters
- $466.4 million to advance Australia’s quantum computing capabilities
- $290 million to extend the $20,000 instant asset write-off for small businesses
- $288 million to expand Digital ID into a whole-of-economy service
- $268 million to support the development of defence industries and skills
- $88.8 million for 20,000 new training places relevant to construction
- $55.6 million to support women’s careers in clean energy
- $14 million to build better markets through trade, promoting competitive and fair global markets
- $10.8 million to support the mental and financial wellbeing of small business owners
The Federal Government said the Budget is designed to accelerate growth of new industries and will fund the establishment of the $1.7 billion Future Made in Australia Innovation Fund. It will also fund the $44.4 million Energy Industry Jobs Plan and $134.2 million for skills and employment support in key regions.
ARENA will also receive funding for a ten‑year extension.
Energy rebates
The Federal Government said it will provide $3.5 billion in energy bill relief for all Australian households and some small businesses.
From 1 July 2024, more than ten million households will receive a total rebate of $300 and eligible small businesses will receive $325 on their electricity bills throughout the year.
The Federal Government estimated that the rebates would help to directly reduce headline inflation by around half a percentage point in 2024–25 and said the rebates were not expected to add to broader inflationary pressures.
Industry comment
ARENA welcomed the expanded funding and new programs announced in the Budget 2024–25.
The $7.1 billion funding package for programs to be administered by ARENA includes:
- $1.9 billion boost to ARENA’s baseline funding
- $2 billion for round two of the Hydrogen Headstart program
- $1.7 billion for the Future Made in Australia Innovation Fund
- $1 billion previously announced for the Solar Sunshot program
- $500 million for the Battery Breakthrough Initiative
ARENA said the funding will help it to build on the existing work and track record of over nearly 12 years in delivering projects that accelerate the energy transition in pursuit of Australia’s emissions reduction targets.
ARENA Chief Executive Officer, Darren Miller, said it was a show of continued support for ARENA in what the agency has previously achieved as leaders in the energy transition.
“It is now more urgent than ever to take action on reducing emissions. ARENA is continuing to perform at the highest level, with the backing of a solid and proven investment strategy and a capable team, we welcome the government’s trust in us to continue our important work,” Mr Miller said.
The Clean Energy Council (CEC) welcomed the Budget 2024–25 as the biggest clean energy Budget in Australia’s history, and said it will unlock tens of thousands of clean energy jobs and place renewables, green metals and critical minerals at the heart of Australia’s economic future.
CEC Chief Executive, Kane Thornton, said the Budget 2024–25 demonstrated resolute and ambitious leadership by the Federal Government on the nation’s clean energy transition.
“This is a Budget that puts renewable energy at the centre of our economic future. The government and the Australian people should be proud of this Budget,” Mr Thornton said.
“The government is doubling down on clean energy, which will deliver lower electricity prices, thousands of jobs in the clean economy and will set Australia up to fulfil its potential as a clean energy superpower.
“The support for green hydrogen is another massive step for our nascent green hydrogen industry.
“The CEC has long advocated for a response to the United States Inflation Reduction Act and this Budget delivers on that,” Mr Thornton said.
The Smart Energy Council (SEC) also welcomed the renewable energy focus in the Budget, and said green hydrogen and critical minerals policies will fuel a Future Made in Australia.
SEC Chief Executive, John Grimes, said, “This Budget changes Australia’s future.
“The Budget marks the start of Australia’s next industrial revolution, one that’s low in pollution and high in jobs. It’s good for the planet, and smart for the economy.
“This charts the pathway to Australia’s prosperity and comparative advantage.
“The Federal Government has responded to calls from the SEC and Australia’s renewables and critical minerals member companies, unions and climate organisations; production tax credits and production credits for critical minerals value adding, renewable hydrogen and ammonia, battery manufacturing and solar panel manufacturing,” Mr Grimes said.
Climate Energy Finance (CEF) said the Future Made in Australia package would make it simpler to invest in Australia, and attract more global and domestic capital.
CEF Founder and Director, Tim Buckley, said, “CEF has been calling for $100 billion of capital and Budget support over the coming decade to accelerate and turbocharge the development of zero-emissions industries of the future here in Australia. In the Budget we saw an excellent $21 billion down-payment. It is great to see that this is additional funding, not the usual political trick of rehashing previous press releases.
“The development of the production tax credit (PTC) model for critical minerals and green hydrogen to incentivise onshore value-adding is a very strong step forward, a clear acknowledgement that Australia can’t simply leave it to free markets when other countries have made such significant public interest interventions, undermining global trade.
“This will leverage Energy Minister Bowen’s 82 per cent Renewables by 2030 initiative, turbocharged by the 32GW Capacity Investment Scheme which is driving the rollout of utility scale firmed renewables by underpinning and catalysing private investment, meaning Australia can power our refineries with renewable energy so as to export embodied decarbonisation,” Mr Buckley said.
Rewiring Australia said the Budget included important commitments to build clean energy manufacturing, reform the energy market and improve the nation’s electrical skill base, which are critical steps towards universal electrification of the nation’s homes.
Rewiring Australia Chief Scientist and Co-founder, Saul Griffith, said, “Australia needs to massively expand its pool of electricians and energy workers so they can install solar, storage and electric appliances on millions of homes and build renewable energy on the grid.
“The government’s $91 million commitment to accelerate the development of a clean energy workforce is vital and overdue.
“The Future Made in Australia announcements of $22.7 billion to create clean energy industries are important for the economy and climate. As we saw during the COVID crisis, every advanced nation needs to make a range of essential products, and for decades to come,” Mr Griffith said.
The Australian Hydrogen Council (AHC) applauded the Federal Government’s vision for Australia’s hydrogen industry outlined in the Budget.
AHC Chief Executive Officer, Fiona Simon, said, “The AHC is delighted to see this Federal Budget deliver the significant investment required to match the ambition and opportunity of the Australian hydrogen industry, manufacturing industry and our trading partners.
“Hydrogen delivers comparative advantage to Australia not only as a molecule but as the critical pathway to decarbonise hard to abate sectors, and establish new high value exports in green steel, green iron and green ammonia. This Budget reflects that production, technology and jobs are all essential parts of ensuring a future made in Australia for hydrogen.
“The $2 billion extension of the Hydrogen Headstart program is critical for early mover hydrogen projects and the $6.7 billion Hydrogen Production Tax Incentive over the next decade for renewable hydrogen produced from 2027 will also help give these early projects certainty as they reach financial investment decisions.
“We look forward to working with the Federal Government, Net Zero Economy Authority, Australian Renewable Energy Agency and other agencies as the Future Made in Australia policy progresses and other Budget initiatives are rolled-out to industry,” Ms Simon said.
Image: Neale Cousland/shutterstock.com
