Australia accelerates investment in net zero transformation

The Australian Government is accelerating funding for a range of clean energy initiatives, underlining its commitment to providing a supportive environment for net zero-aligned investment.

In its Mid-Year Economic and Fiscal Outlook 2024–25 (MYEFO), the Australian Government announced funding to:

• enhance cooperation with Germany on developing renewable hydrogen supply chains through a joint H2 Global funding window, to connect buyers in Europe with Australian green hydrogen suppliers.
• advance renewable hydrogen production, with legislation to establish a Hydrogen Production Tax Incentive currently before the Australian Parliament. This incentive is expected to provide A$2 for every kilogram of eligible renewable hydrogen produced for up to 10 years, between 1 July 2027 and 30 June 2040.
• advance critical minerals production, with legislation to establish a Critical Minerals Production Tax Incentive currently before the Australian Parliament. This incentive is expected to provide a production incentive valued at 10% of relevant processing and refining costs for Australia’s 31 critical minerals.
• establish local battery manufacturing through the Battery Breakthrough Initiative. The Australian Renewable Energy Agency (ARENA) is developing the initiative as part of the National Battery Strategy. The initiative is expected to offer production credits and capital grants to companies developing and manufacturing batteries in Australia.
• make it simpler to invest in Australia and attract more global and domestic capital by establishing a single point of entry for investors and proponents of major transformational projects. Design of the prioritisation and facilitation functions for the new ‘Front Door’ commences in January, with pilot service delivery from September 2025.

Modernising Australia’s energy infrastructure

The Australian Government is also committing funding:

• to recapitalise the Rewiring the Nation program and provide additional concessional finance and underwriting support for transmission and distribution projects
• in new innovations and technologies to deliver more energy through existing infrastructure. These include integrating batteries and other demand management technologies into local grids, and new technologies like digital twins to improve reliability
• to establish the Accelerated Connections Fund. This fund aims to fast-track connections for new critical renewable generation and clean storage projects.

The Government is also partnering with states and territories to reduce regulatory costs impacting the net zero transformation.

First Nations Clean Energy Strategy released

Released in December 2024, the First Nations Clean Energy Strategy aims to improve engagement between Traditional Owners, industry and government to achieve mutual benefits in the net zero transformation.

Enabling equitable partnerships is a key focus for the Strategy. The partnership between the First Nations Yindjibarndi people and Filipino-listed renewables company ACEN to develop and operate clean energy projects in Western Australia’s Pilbara region highlights the opportunities for collaboration between investors and Australia’s First Nations communities.

Investing in Southeast Asia’s clean energy transition

In addition to investing in Australia’s net zero initiatives, the Australian Government is supporting the clean energy transition in Southeast Asia alongside like-minded international partners.

Australia’s first investment under the A$2 billion Southeast Asia Investment Financing Facility will provide US$50 million (approximately A$75 million) equity investment in the Financing Asia’s Transition Partnership (FASTP) Green Investments Partnership fund. Backed by the Singapore Government, the fund supports lending to sustainable infrastructure projects in Southeast Asia.

The Southeast Asia Investment Financing Facility was established to boost Australia’s investment in the region as part of Invested: Australia’s Southeast Asia Economic Strategy to 2040.

More about investing in Australia’s renewable energy future.