Australia invests $15 billion to boost minerals industry and lead renewable energy revolution

The Labor Government of Australia announced on Tuesday that the country intends to invest up to US $15 billion over the next decade to grow its crucial minerals industry and establish itself as a renewable energy superpower.

The cabinet released its Future Made in Australia strategy to “help Australia succeed and remain an indispensable part of the global economy as the world undergoes the biggest transformation since the industrial revolution.” It also promises to create new employment and opportunities.

Australia as a clean energy powerhouse

Australia will set aside money to promote cutting-edge technology, such as batteries, low-carbon liquid fuels, and green metals. A Critical Minerals Production Tax Incentive and a Hydrogen Production Tax Incentive are also included in the revised proposal.

Establishing the Critical Minerals Production Tax Incentive offers a production incentive worth 10% of processing and refining expenses for Australia's 31 critical minerals refined and processed between 2027–2028 and 2039–2040. The incentive programme is applicable for a maximum of 10 years per project. The budget set for this programme is $4.65 billion over the medium term.

The Hydrogen Production Tax Incentive programme amounts to $4.45 billion over the course of 10 years and offer a $1.33 reward each kilogram of renewable hydrogen produced between 2027–2028 and 2039–2040.

Additionally, the government has also set aside funds for a national hydrogen plan to position Australia as a global leader in hydrogen by 2030.

To lead the world in green hydrogen generation, Australia set aside $860 million in the 2023–24 budget to expedite large-scale renewable hydrogen projects.

The nation also produces a significant amount of nickel, which is also essential for battery production, and lithium, which is the primary material in the world's most advanced battery technology today.

Even though Australia is spending billions on low-carbon energy, it is realizing that natural gas will be essential to the country's energy transition.

When announcing its Future Gas Strategy last week, the government stated that Australia will keep supporting natural gas exploration and production because the fuel will be essential to the nation's transition to a net-zero economy by 2050 and will also help Australia's allies have a consistent supply of energy.