Australia passes legislation to help secure a net zero future

On 28 November 2024, the Australian Parliament passed legislation that will enable the Australian Government to put elements of its A$22.7 billion Future Made in Australia (FMA) agenda into action.

The passing of the FMA legislation will help improve Australia’s investment environment. The implementation of measures included in the legislation will provide investors with:

• greater clarity on how priority sectors will be assessed for government support
• guidance on principles to help ensure the Australian community benefits from investments
• opportunities to access an Innovation Fund to support R&D in emerging net zero industries
• a way to measure and authenticate the emissions intensity of renewable energy products through a voluntary Guarantee of Origin certification scheme.

The FMA agenda supports Australia’s net zero transformation. It includes a range of measures to encourage investment, including reforming and renewing Australia’s foreign investment framework, innovation grants and government-backed finance for transformational projects.

National Interest Framework and Community Benefit Principles  

The passing of the FMA legislation in November 2024 will see the Australian Government:

• introduce a National Interest Framework, to establish an assessment process by which sectors will be identified as potential candidates for government support
• introduce Community Benefit Principles, which aim to ensure investments deliver benefits to the Australian community (including First Nations peoples) and grow priority sectors
• establish a new A$1.7 billion FMA Innovation Fund and expand the role and functions of the Australian Renewable Energy Agency (ARENA). The Innovation Fund will support R&D for emerging net zero industries such as green metals and low carbon liquid fuels. 

The Australian Government also introduced legislation for a Hydrogen Production Tax Incentive and Critical Minerals Production Tax Incentive to Parliament. This is being held over for review in 2025.

Guarantee of Origin Scheme established

The passing of the Future Made in Australia (Guarantee of Origin) Bill 2024 and its 2 supporting bills will also help Australia to establish a voluntary Guarantee of Origin (GO) scheme.

Developed in collaboration with international partners, the certification scheme will authenticate low-emissions products and support renewable electricity. It will help ensure renewable energy and decarbonised products can be properly valued. 

The GO scheme will help Australian producers remain competitive internationally by accounting for and accurately presenting the low-emissions reality of their products. It will also provide investors with regulatory certainty for their Australian projects.

The GO scheme will begin with hydrogen, and will expand to cover green metals and low-carbon liquid fuels. It complements other net zero initiatives such as the Capacity Investment Scheme and the Safeguard Mechanism. 

Australia on track to meet climate action goals 

Australia’s Annual Climate Change Statement 2024 shows the nation is on track to meet its legislated goal of cutting greenhouse gas emissions by 43% (compared to 2005 levels) by 2030. 

Australia’s emissions are currently 28.2% below 2005 levels, with baseline projections showing emissions falling by 42.6% below 2005 levels over the next six years.

Tabled in the Australian Parliament annually since 2022, the Annual Climate Change Statement reports on Australia’s progress towards its goal of net zero by 2050. It also reports on climate change and energy initiatives and the work underway to ensure Australia meets its climate goals.

Key achievements in the 2024 statement include:

• investments in hydrogen hubs in Queensland, Western Australia and Tasmania
• declaring additional offshore wind zones off the coasts of New South Wales, Victoria and Western Australia
• opening 4 tenders under the Capacity Investment Scheme 
• releasing a refreshed National Hydrogen Strategy.

Net zero opportunities for investors

Australia welcomes investment in its net zero future. We have a global reputation as a safe destination for large-scale investment in solar, wind, green hydrogen, battery and energy storage. The Australian Government also offers programs, grants and incentives to support investors. 

Find out why Australia is a great investment destination in Austrade’s Why Australia Benchmark Report 2024.