Australian Taxation Office (ATO)

The Hydrogen Production Tax Incentive is an Australian federal tax measure that provides a refundable tax offset of 2 Australian dollars per kilogram of eligible renewable hydrogen produced by qualifying companies for up to ten years per facility between the 2027–28 and 2039–40 income years.[5][6][7][8] It is designed as an uncapped, demand‑driven incentive targeting medium‑ to large‑scale renewable hydrogen projects that meet strict emissions‑intensity criteria, facility size thresholds, and certification rules under the Guarantee of Origin Scheme. The policy forms a central plank of the Future Made in Australia package, aiming to accelerate industry scale‑up and reduce production costs over time.[6][7]

The grid-matching requirements are detailed rules set out in the Income Tax Assessment (Hydrogen Production Tax Incentive – Grid Matching Requirements) Draft Instrument 2026, specifying how grid-connected hydrogen projects must demonstrate that the electricity used in hydrogen production corresponds to renewable generation on the same grid.[2][3][4][7] These requirements are intended to ensure that renewable hydrogen claiming the tax incentive does not inadvertently increase demand for non‑renewable electricity elsewhere on the system and that the emissions accounting underpinning the incentive aligns with Australia’s Guarantee of Origin Scheme and emerging Renewable Electricity Guarantee of Origin certificates.[2][7][10]

The Guarantee of Origin Scheme is a national certification framework administered by the Clean Energy Regulator that tracks the emissions intensity and origin of products such as hydrogen and renewable electricity.[10] It issues Product Guarantee of Origin certificates for low‑emissions products and Renewable Electricity Guarantee of Origin certificates for renewable electricity generation, providing a standardised way for producers and consumers to evidence how and where energy products were made and their associated lifecycle emissions. The scheme underpins eligibility for the Hydrogen Production Tax Incentive by verifying both the emissions intensity of hydrogen and compliance with grid-matching rules for grid-sourced electricity.[7][10]

Nationwide (policy applies to grid-connected hydrogen facilities across Australian electricity networks)