The economics of producing green hydrogen weighed on the miner’s decision to scrap a 15 million tonnes per annum green hydrogen production target and push down four global hydrogen projects down the priority chain last year.

A $2 per kilogram offset for green hydrogen producers will be available for projects which come online between 2027-28 to 2039-40 for a period of up to ten years.

Downstream processors of Australia’s 31 critical minerals will also stand to benet from a 10 per cent credit on processing and rening costs over that same timeframe.

Fortescue Metals chief executive Dino Otranto hailed the passing of the tax credits.

“The passing of the Hydrogen Production Tax Incentive is a critical step in driving investment in green hydrogen – something we need an abundance of if we are to build a green iron metal industry in Australia,” he said.

“By reducing production costs, this will pave the way for a more competitive, robust and scalable green hydrogen industry.”

“This forward-thinking policy, alongside the Albanese Government’s strong strategic focus and previously announced support for the aluminium sector, will also be integral to driving decarbonisation to enable industry to achieve real zero.”

Among the other players pursuing hydrogen projects are BP, Woodside, Yara Pilbara and InterContinental Energy.

BP is progressing its H2Kwinana green hydrogen project in Kwinana, understood to be subject to the outcomes of the federal government’s $2 billion Hydrogen Headstart incentive program.

“BP welcomes any legislation that will assist hydrogen production,” a company spokesperson said in response to the tax credits passing.

BP also has a majority stake and is the operator of the proposed Australian Renewable Energy Hub in the Pilbara alongside stakeholders InterContinental Energy and CWP Global.

The mammoth $55 billion Pilbara project is targeting production of up to 1.6 million tonnes of green hydrogen or 9 million tonnes of green ammonia per annum.

InterContinental has a majority interest in the proposed Western Green Energy Hub near Eucla, alongside stakeholders CWP and Murning Green Energy. That proposed project hopes to produce 3.5mtpa of green hydrogen, which would make it the largest in WA.

InterContinental head of Australia Isaac Hinton said the incentive provided the legislated certainty and support needed to accelerate large- scale green hydrogen projects.

“Incentives such as this demonstrate a strong commitment to building a sustainable future and to diversifying our economy,” he said.

“It will enable projects like AREH and WGEH to deliver on their promise of creating jobs, driving investment, and decarbonising industries at scale.”

Industry groups also praised the passage of the tax credits.