Australia to reshape manufacturing base as Greens deal excludes fossil fuels from flagship industry policy

The scene has been set for Australia to reshape its manufacturing base for the green industries of the future as the Albanese government legislates its signature industry policy.

More than $22 billion is expected to be spent over the next 10 years under the Future Made in Australia plan designed to funnel investment and resources into industries such as renewable energy and critical minerals.

The Greens made a last-minute commitment on Thursday to vote for Future Made in Australia under the proviso no support would go to coal, oil and gas.

Export Finance Australia will also be barred from investing in fossil fuel industries, the minor party said in a statement. 

“In negotiations on Future Made in Australia, the Greens have stopped billions of dollars of public money going into coal, oil and gas projects, here or overseas,” Greens leader Adam Bandt said.

“Greens pressure works,” he added.

Prime Minister Anthony Albanese says Australia must seize the opportunity provided by the net-zero transition.

“We are in a position where we have a unique set of national strengths that we can turn to our advantage,” Mr Albanese said in parliament on Thursday.

“We have the critical minerals and materials to drive global decarbonisation, not just here, but offshore as well, and we have the best solar resources in the world.”

Local solar and battery manufacturing programs as well as net-zero training schemes have already been nested under the Future Made in Australia umbrella. 

The centrepiece of the agenda – production tax credits for critical minerals and renewable hydrogen – is yet to pass the Senate after being introduced to parliament on Monday. 

It will need to secure the support of either the opposition or crossbenchers to pass.

The prime minister is confident non-coalition members will back the tax credit bill.

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.

AAP