The Australian Federal Budget for 2024-25 announced significant advancements for the hydrogen industry, reinforcing Australia’s ambition to become a global leader in clean energy and the net zero transition. This article summarises the highlights and implications for Australian companies within the hydrogen sector.
ONE Economic Context and Budget Overview
Amid global economic uncertainties, Australia’s Federal Budget for 2024-25 managed to achieve a surplus. Although a deficit is forecast for next year due to increased spending in health, aged care and defence, the budget strategically invests in renewable energy, particularly hydrogen. This underscores the government’s commitment to positioning Australia at the forefront of renewable energy innovation.
TWO Clean Energy Funding
The Australian Renewable Energy Agency (ARENA) has been tasked with a suite of new funding programs to administer under which green hydrogen production and use continues to be a focus. The $1.7 billion Future Made in Australia Innovation Fund supports innovative projects in the renewable hydrogen sector and other clean energy technologies. A further $1.5 billion has been allocated to ARENA’s core funding programs which invest in renewable energy and related technologies. These investments in innovation, skills transfer, and infrastructure are crucial for technological advancement and industry growth.
THREE Hydrogen Headstart Program
Continuing the Budget’s clean energy focus, the Hydrogen Headstart program announced in the prior year Budget now receives an additional $1.3 billion. The program is designed to bridge the green premium for early-mover hydrogen projects, propelling Australia’s hydrogen industry forward by offering competitive production contracts to support renewable hydrogen production.
FOUR Financial Incentives and Tax Reforms
Several tax incentives are introduced to benefit businesses in the clean energy sector. A new tax incentive to incentivise hydrogen production will provide $2 per kilogram of renewable hydrogen produced. Together with the Critical Minerals Production Tax Incentive, the program will apply to production between 1 July 2027 and 30 June 2040.
SIX Strategic Implications for Australian Companies in the Hydrogen Sector
The budget’s focus on hydrogen and clean energy presents significant opportunities and strategic imperatives. Financial support and infrastructure investments will reduce operational costs, enhance market readiness, and accelerate the commercialisation of hydrogen-powered vehicles. Additionally, aligning federal policies with global clean energy trends positions Australian companies to expand their market reach both domestically and internationally within the growing hydrogen economy.
Conclusion
The 2024-25 Federal Budget demonstrates the Australian government’s strong commitment to clean energy and the hydrogen industry. This commitment represents a significant step toward making Australia a renewable energy superpower, with hydrogen playing a pivotal role.
Written by
Rebecca Barnes (RSM), Antony Tolfts (H2X) & Magnus Olsson (H2X)
About H2X Global
Zero emissions, extended driving ranges, and 5-minute refuelling times—H2X Fuel Cell Electric Vehicles are setting new standards in commercial transportation. Featuring the world’s only hydrogen-powered 4×4 and a proprietary battery-free power system, H2X leads the charge toward a cleaner, more efficient future in transport.
About RSM
RSM is one of Australia’s leading professional services firms, offering a range of business services from over 30 offices across the nation. Awarded “Best Accounting and Consulting Firm” by Australia’s Client Choice Awards for the last 6 years in a row, the company is deeply committed to its clients and to excellent service.
