Failing to secure production tax credits for critical minerals and renewable hydrogen will be a blow to industry and jobs, the federal resources minister has posited in a bid to drum up political support for the key Labor policy.
Madeleine King urged the federal opposition, Greens and crossbench senators to support the tax incentives for net zero industries, arguing the plan had "many friends in industry".
"If (Opposition Leader) Peter Dutton and the coalition choose not to support the resources sector, well, people should know about that, because it's all about Australian jobs in the face of the need internationally to secure supply chains," she told ABC radio on Monday,
"If Peter Dutton and the coalition want to vote against that? Well, I guess we leave it up to them."
In his budget reply speech, the opposition leader dubbed the proposal "corporate welfare for billionaires".
Legislation for production tax credits totalling $13.7 billion is expected to be introduced to parliament on Monday.
The production tax credits are the centrepiece of Labor's broader Future Made in Australia package aimed at securing the nation's place in the global net zero supply chain.
The production incentive for critical minerals and rare earths would refund 10 per cent of the processing and refining costs between 2027/28 and 2039/40, for up to 10 years per project.
Tax credits of $2 per kilogram would be made available for production of renewable hydrogen between 2027/2028 and 2039/40, for up to ten years per project.
The Chamber of Minerals and Energy of Western Australia chief executive Rebecca Tomkinson wants the government incentives to go ahead, arguing they would "level the playing field in what is an intensely competitive global market".
"Australia's resources, including our critical minerals, have a key role to play in the energy transition," she said.
Clean Energy Council decarbonisation policy director Anna Freeman said key to the policy design was incentives only going to businesses once they actually produced hydrogen and critical minerals.
"Other major markets, including the United States and Canada, are providing generous support to hydrogen production and Australia too needs to create attractive investment conditions if we are to attract the tens of billions of dollars of new private investment waiting in the wings," she said.
Superpower Institute chief executive Baethan Mullen said in the absence of a price on carbon, hydrogen production credits would not act as a subsidy.
"They instead represent sound economics by levelling the playing field between green products that do not damage the environment, and products produced with fossil fuel which do," he said.
The institute wants Australia to leverage its vast renewables energy resources to become a net zero superpower exporting green iron and other energy-intensive goods to the world.
"Australia has likely the best combination of solar, wind and biomass resources in the world and so has an obligation as well as an opportunity to produce goods that can reduce world emissions by up to 10 per cent," Mr Mullen said.
