Federal Budget Seeks To Supercharge Renewable Fuels

Last night’s Federal Budget included record funding for Australia’s hydrogen and renewables industries, including low carbon liquid fuels, new incentives to employ apprentices, and an extension of the instant asset write-off.

The 2024-25 handed down by Treasurer Jim Chalmers had a strong focus on cost-of-living, housing, and the recently announced Future Made-in-Australia measures.

Key headlines for the heavy vehicle sector include:

• $84.5 million to support implementation of the New Vehicle Efficiency Standard (NVES). This includes provision to improve the functionality of ROVER both for overall function and for the operation of the NVES;
• Funding to establish an electric vehicle Centre of Excellence at the Canberra Institute of Technology;
• Record funding for Australia’s hydrogen and renewables industries, including low carbon liquid fuels;
• Support for skills and training, including funding to promote the appeal of VET for students, parents and teachers;
• Lowering of permanent migration planning levels to 185,000 (from 190,000 this year)
• $325 energy rebates for more than one million small businesses; and
• Extending the $20,000 instant asset write-off by 12 months until 30 June 2025 for businesses with a turnover of less than $10million.

Hydrogen, Renewables, Low Carbon Liquid Fuels

A record $7.1 billion has been committed for ARENA, including $2 billion for round two of the Hydrogen Headstart program, and $6.7 billion over 10 years for a $2 per kilogram Hydrogen Production Tax Incentive for renewable hydrogen produced from 2027.

Further announcements regarding hydrogen include $17.1 million over four years from 2024-2025 to deliver the 2024 National Hydrogen Strategy including hydrogen infrastructure planning, social license, and industry safety training and regulation, and $32.2 million to fast track the initial phase of the Guarantee of Origin scheme focused on renewable hydrogen in 2024-25, then expansion to green metals and low carbon liquid fuels.

Low carbon liquid fuels receive $20.9 million over four years from 2024-2025 for further consultation on incentives to support the production and demand for low carbon liquid fuels including development of a Guarantee of Origin scheme.

Notably, the Budget included $1.5 million over two years from 2024-25 to undertake a regulatory impact analysis of the costs and benefits of introducing mandates or other demand-side measures for low carbon liquid fuels.

There is also $18.1 million over six years for foundational initiatives to expedite the emergence of Australia’s green metals industry and consultation on incentives to support the production of green iron, steel, alumina and aluminium.

Future Made In Australia

Some $1.7 billion has been allocated for a new Future Made In Australia Innovation Fund to support innovation, commercialisation, pilot and demonstration projects, and early stage development in priority sectors, including renewable hydrogen, green metals, low carbon liquid fuels and clean energy technology manufacturing.

Net Zero Economy Authority

The Budget includes $399.1 million to establish the Net Zero Economy Authority to support the economy-wide net zero transformation for private and public investment, major project development, employment transition, skills and community development.

ROVER

Whilst the $84.5 million in funding for the NVES does include a provision to improve the functionality of ROVER to incorporate the NVES, it is expected a portion of this funding will go towards overall improvements to the ROVER system.

Centre Of Excellence

The Government is investing $9.66 million, which will be matched by the ACT Government, to establish the Centre of Excellence at the Canberra Institute of Technology which will help train EV technicians for the net-zero transformation.

CIT will receive an additional $4.8million to fast-track the work on the Centre of Excellence, due to the urgency of this initiative.

As part of the Federal Government’s TAFE Technology Fund, CIT will also receive $3.2 million to update automotive facilities for EV training at its Fyshwick campus, including expanding the facilities to accommodate heavy vehicle training.

Apprenticeships

On apprentices, apprentice employer incentives replace some of the funding which was due to be reduced from June 30.

There will also be $4.4 million for VET in 2024-25 to promote the appeal of VET for students, parents and teachers.

The Budget also includes $55.6 million for Building Women’s Careers Program to support women to access flexible training in clean energy, construction, tech and advanced manufacturing, and $91 million to develop the clean energy workforce, including by turbocharging the VET teacher, trainer and assessor workforce, and funding clean energy training facility upgrades and capacity expansion.

There will be $265.1 million over four years from 2024-25 to adjust previously scheduled phase two incentive system payments to provide further support for apprentices, trainees and their employers in priority occupations, while the Government undertakes a strategic review of the Australian Apprenticeships Incentive System.

The measure will increase phase two payments for apprentices in priority occupations from $3,000 to $5,000 and hiring incentives for priority occupation employers from $4,000 to $5,000 for 12 months from July 21, 024. The skills priority list can be found here.