Hydrogen Production Tax Incentive – grid matching instrument

Give feedback on the Income Tax Assessment (Hydrogen Production Tax Incentive – Grid Matching Requirements) Draft Instrument 2026.

The draft instrument sets out the grid matching rules for hydrogen producers who want to claim the Hydrogen Production Tax Incentive.

The incentive provides a refundable tax offset of $2 per kilogram of eligible hydrogen produced.

To qualify, producers must:

• meet emissions standards and

• be certified under the Guarantee of Origin Scheme.

The tax offset will be available from 1 July 2027 to 30 June 2040. Each project can access the offset for up to 10 years.

The draft instrument applies to grid-connected hydrogen projects. These projects must source renewable electricity from the same grid they are connected to.