According to a report by Mining.com, citing Reuters, the Australian government announced on Monday that it will enact legislation to introduce tax incentives aimed at encouraging investment in the mining sector, with the goal of expanding the production of renewable hydrogen and critical minerals—both of which will play a crucial role in the energy transition strategy.

The Australian government stated that, between the 2027/2028 fiscal year and the 2039/40 fiscal year, the proposed legislation will provide a 10% cost allowance for the processing and smelting of 31 critical minerals.

For renewable hydrogen, the bill stipulates that a tax credit of AUD 2 per kilogram (USD 1.31) will be provided for renewable hydrogen produced in the same period.

“This bill will make Australian investment more transparent and stable, add greater value to our natural resources, and help deliver cheaper, cleaner energy,” said Treasurer Jim Chalmers in a statement.

“Once projects that produce hydrogen or process critical minerals needed for wind turbines, solar panels, and electric vehicles begin operating, the government will offer tax incentives,” Chalmers said.

Major economies are all investing billions of dollars to support clean energy projects and enhance the competitiveness of electric vehicle and semiconductor production—both of which are critical for economic prosperity and national security.

In May of this year, Australia’s center-left Labor Party pledged in its budget to implement tax relief measures totaling A$7 billion over the fiscal years 2027/28–2039/40 to support critical mineral processing, and A$6.7 billion to boost renewable hydrogen production.