We’re seeking your views on a proposed legislative instrument to help us evaluate the proposed approach for assessing capacity equivalency, identifying implementation issues and informing the final design of the legislative instrument.
Background
The Hydrogen Production Tax Incentive is a refundable tax offset of $2 per kilogram of eligible low-emissions hydrogen. It will apply to hydrogen produced in income years between 1 July 2027 and 30 June 2040, for a maximum of 10 years.
Hydrogen producers that want to apply for the incentive must be certified through us. One of the matters we assess for eligibility is whether the facility satisfies the capacity requirement set out in section 421-55(3)(b) of the Income Tax Assessment Act 1997.
The legislative instrument is intended to establish a common basis for assessing applications for the incentive. It will prescribe:
- how capacity is to be expressed
- how capacity to produce hydrogen is determined
- the circumstances in which a facility is taken to have a capacity equivalent to a hydrogen electrolyser with a nameplate capacity of 10 megawatts.
The incentive currently applies to hydrogen production by electrolysis and will apply to the recently established pathways under the Future Made in Australia (Guarantee of Origin) Methodology Determination 2025:
- gas reforming
- solid gasification and pyrolysis.
As the Guarantee of Origin Scheme expands beyond the initial electrolysis pathway, other hydrogen pathways could be eligible for the incentive.
Consultation documents
- Consultation paper: Hydrogen Production Tax Incentive capacity equivalence legislative instrument
- Coversheet: Hydrogen Production Tax Incentive capacity equivalence legislative instrument [DOCX 83 KB]
Have your say
To have your say:
- read the consultation paper
- complete the coversheet with your details and respond to the 4 consultation questions
- email your response and coversheet to PGO@cer.gov.au.
We also welcome any other feedback you have about the legislative instrument.
Submit your feedback by 11:59 pm AEDT on Monday 30 November 2026.
Any submissions received after this date will be considered at our discretion.
Next steps
We’ll consider submissions and use them to inform the drafting of the legislative instrument. We’ll announce the legislative instrument when it’s finalised.