Australian Government response: Future Made in Australia Bill inquiry

The Australian Government thanks the Senate Economics Legislation Committee (the committee) for its consideration of the Future Made in Australia Bill 2024 and the Future Made in Australia (Omnibus Amendments No. 1) Bill 2024.

The Future Made in Australia Bill 2024 and the Future Made in Australia (Omnibus Amendments No. 1) Bill 2024 passed Parliament on 29 November 2024 and came into force on 11 December 2024.

Administrative responsibility for Parts 1, 3 and 4 (excluding section 13) of the Future Made in Australia Act 2024 transferred to the Department of Industry, Science and Resources on 13 May 2025.

The government provides the following response to the Committee’s recommendations. The corresponding paragraph number in the Committee’s report are included next to each recommendation for reference.

Dissenting report from the Australian Greens

Response: the Australian Government does not support this recommendation.

The Australian Government remains committed to its $1.5 billion planned equity investment to support the development of common user infrastructure at the Middle Arm Sustainable Development Precinct (Middle Arm) in the Northern Territory (NT).

A final investment decision by the Australian Government will be made in due course, in accordance with the requirements of the Commonwealth Investment Framework and informed by Infrastructure Australia’s evaluation of the business case in development by the NT.

The Australian Government’s investment will pave the way for Middle Arm to be a globally competitive, sustainable precinct, that takes advantage of new economic opportunities and delivers sustainable jobs for the future. Australian Government funding will underpin infrastructure that supports industries critical to meet our commitment to net zero.

Response: the Australian Government supports this recommendation.

Amendments to the Future Made in Australia Bill to address this recommendation were made by the government during debate in the Parliament. The amendments, to insert clause 10A of the Future Made in Australia Bill, prohibit the provision of Future Made in Australia support for the extraction of coal, natural gas or crude oil, the construction of infrastructure for the primary purpose of extracting coal, natural gas or crude oil, or investments solely for their use.

Response: the Australian Government does not support this recommendation.

As outlined above, the government amended the Future Made in Australia Bill to prohibit the provision of Future Made in Australia support for the extraction of coal, natural gas or crude oil, the construction of infrastructure for the primary purpose of extracting coal, natural gas or crude oil, or investments solely for their use. This amendment ensures that the Future Made in Australia agenda remains focused on maximising the economic benefits of the global transition to net zero and building an economy based on clean energy.

Australia is committed to achieving the Paris Agreement’s temperature goals, including pursuing efforts to keep 1.5 degrees within reach. Australia is transitioning away from fossil fuel in our domestic energy systems—from 35% renewable electricity in 2023 to 82% by 2030. The Future Gas Strategy highlights that gas will play a role in the energy landscape. Gas-powered generation will remain an important source of long-duration firming for renewable generation during the transition. Recognising that many of Australia’s high‑heat industries cannot readily electrify, the Strategy highlights the ongoing importance of gas, helping bridge the shift toward cleaner alternatives like hydrogen. Through its response to the recommendations to the Gas Market Review, the government is exploring reforms to secure affordable gas for Australian industry. This includes a gas market reservation. Australia exports over two‑thirds of the energy it produces, and therefore production is largely dependent on international demand. Australia will continue to remain a trusted trading partner and support the economic development, energy security, and decarbonisation pathways of our region.

One of the central goals of Future Made in Australia is ensuring Australia remains a reliable and indispensable partner in the global net zero economy. This includes leveraging our comparative strengths in renewable energy to build new clean energy industries, and supporting our trading partners in achieving their climate commitments.

Response: the Australian Government does not support this recommendation.

The Fuel Tax Credits (FTC) scheme is available to all eligible businesses and aims to remove the tax burden on fuel used by businesses as an input when producing goods and services. FTC on eligible fuel for business activities are limited to the fuel tax revenues collected on that fuel.

Response: the Australian Government notes this recommendation.

The government recognises that electrifying activities where possible is one of the major steps for decarbonising the economy and is delivering a suite of policies and programs to support electrification and broader energy performance improvements. For example, the $1.7 billion Energy Savings Package in the 2023–24 Budget helps finance electrification efforts, including through the Household Energy Upgrade Fund and the Social Housing Energy Performance Initiative. The National Electric Vehicle Strategy, Driving the Nation, Australian Renewable Energy Agency (ARENA) grants and CEFC financing will also support electrification by households, businesses and industry.

Electrification and other pathways like alternative fuels and inputs like green hydrogen and bioresources are also key enablers of the Future Made in Australia priority sectors like green metals. Policies and programs encouraging business and industry to electrify and decarbonise include the Safeguard Mechanism, which incentivises large facilities to reduce emissions in the near-term.

Industrial electrification and decarbonisation projects can apply for debt or equity funding through the National Reconstruction Fund Net Zero Fund (once operational) and the Powering the Regions Fund.

It will be important to balance ambition with practical implementation, particularly for hard to abate sectors and high-heat industrial processes or where electrification is not yet possible.

Response: the Australian Government notes this recommendation.

A Future Made in Australia is the government’s flagship industrial policy initiative, designed to capitalise on Australia’s advantages to maximise the economic and industrial benefits of the move to net zero, and safeguard sovereign capability and economic resilience in a changing global economic and strategic landscape.

Response: the Australian Government notes this recommendation.

As outlined above, the Future Made in Australia Bill, as enacted, legislates a National Interest Framework to support better alignment of economic incentives with our national interests. It does not replace existing mechanisms for support.

The National Interest Framework establishes a process for government to identify sectors aligned with the national interest, and also for analysis of opportunities to address barriers to private investment in those sectors. The Framework allows for a range of different considerations, including the role of public investment in unlocking private investment at scale in the national interest.

The Bill also establishes Community Benefit Principles to ensure public investment and the private investment it attracts flows to communities in ways that benefit local workers and businesses.

Response: the Australian Government notes this recommendation.

As outlined above, the Future Made in Australia Bill, as enacted, legislates a National Interest Framework to support better alignment of economic incentives with our national interests. It does not replace existing mechanisms for support.

Response: the Australian Government supports this recommendation.

The government is committed to lasting economic empowerment for First Nations people, including by unlocking the opportunities of the global transition to clean energy. To this end, the government introduced amendments to clause 10(3) of the Future Made Australia Bill to incorporate an additional Community Benefit Principle to recognise the importance of First Nations communities and Traditional Owners participating in and sharing in the benefits of the transition to net zero.

The government has also released a First Nations Clean Energy Strategy, a priority action under the National Energy Transformation Partnership. The Strategy, launched in December 2024, establishes a national framework to guide investment, influence policy and empower First Nations Australians to participate actively in, and benefit from, Australia’s clean energy transformation. In addition to its release, the government is investing $70 million over 3 years, starting 2025–26, to support the Strategy implementation. This funding will help establish the First Nations Clean Energy Futures Implementation and Grants Programs, designed to reduce barriers to accessing clean energy and support new clean energy projects led by First Nations Peoples.

Additional comments from Senator David Van

Response: the Australian Government notes this recommendation.

Sector assessments under the Future Made in Australia Bill, as enacted, will be conducted using an evidence-based process drawing on relevant data, analysis and expertise across government, as well as public consultation where necessary.

Sector assessments will be tabled in Parliament.

The government introduced an amendment to the Note to clause 8 of the Future Made in Australia Bill during debate in the Parliament to clarify the consultation requirements for sector assessments (see response to Recommendation 19).

Response: the Australian Government notes this recommendation.

The Future Made in Australia Bill, as enacted, establishes a framework to support Australian Government consideration and decision-making in relation to significant public investment. It complements rather than replaces existing frameworks for Commonwealth investment, including those focused on transnational matters such as strategic regional engagement.

Response: the Australian Government notes this recommendation.

The government is working with states and territories to develop Renewable Energy Zones where clusters of large-scale renewable energy projects can be developed using economies of scale, supported by network infrastructure.

The government acknowledges the role of batteries in supporting Australia to decarbonise. Clean energy manufacturing, including battery manufacturing, is aligned with the economic security and resilience stream of the Future Made in Australia National Interest Framework in the 2024–2025 Budget.

As part of the package, the government announced the $500 million Battery Breakthrough Initiative to provide targeted funding to support battery manufacturers to make high-value battery products and build scale across the value chain in Australia.

The program, delivered by the Australian Renewable Energy Agency, aligns with Australia’s National Battery Strategy. Program guidelines launched on 19 August 2025.

The government is providing support for households to install batteries through various programs including the Cheaper Home Batteries Program, Household Energy Upgrades Fund and the Social Housing Energy Performance Initiative.

Response: the Australian Government supports this recommendation.

Green metals are aligned with the net zero transformation stream of the Future Made in Australia National Interest Framework, as identified in the 2024–2025 Budget. A range of government supports are available to support Australia’s green metals sector, including:

• A $2 billion Green Aluminium Production Credit to support Australia’s aluminium smelters to transition to renewable electricity.
• A $1 billion Green Iron Investment Fund to co-invest in new green iron projects, including up to $500 million to support the transformation of the Whyalla Steelworks.
• $750 million under the Future Made in Australia Innovation Fund, administered by the ARENA, to support innovation, commercialisation, pilot and demonstration projects and early-stage development in relation to green metals.
• Support for foundational initiatives to expedite the emergence of Australia’s green metals industry, including through enhanced industry and research collaboration as part of the Green Metals Innovation Network, led by Commonwealth Scientific and Industrial Research organisation (CSIRO). This complements efforts led by the Heavy Industry Low-carbon Transition (HILT) CRC to accelerate the development of decarbonisation technologies than can be commercialised and support net zero production.
• Support through the Powering the Regions Fund for decarbonisation and domestic production with over $280 million in grants announced for the steel and aluminium sectors.

Response: the Australian Government supports in principle this recommendation.

Low carbon liquid fuels are aligned with the net zero transformation stream of the Future Made in Australia National Interest Framework, as identified in the 2024–2025 Budget. The government has consulted on options for production incentives and other measures to support production of low carbon liquid fuels in Australia.

The $1.1 billion Cleaner Fuels Program was announced by government in 2025, supporting an Australian low carbon liquid fuel industry by incentivising domestic production.

The Future Made in Australia Innovation Fund, administered by the ARENA, provides $250 million to support innovation, commercialisation, pilot and demonstration projects and early-stage development in the low carbon liquid fuels sector.

Response: the Australian Government supports in principle this recommendation.

Like any other tradeable commodity in a global market, domestically produced LCLFs could be used both domestically and internationally. Greater use of LCLFs would support global decarbonisation efforts in sectors that are expected to be reliant on liquid fuels including transport (aviation, heavy vehicles, rail and maritime), mining, agriculture and construction.

Response: the Australian Government notes this recommendation.

The government’s Future Made in Australia Bill, as enacted, legislates a National Interest Framework to support better alignment of economic incentives with our national interests. The National Interest Framework consists of 2 streams:

• the net zero transformation stream
• the economic resilience and security stream.

Australia’s 2024 National Defence Strategy and 2023 Defence Strategic Review make clear Australia’s national security and defence priorities for the next decade.

The government also has a range of mechanisms to advance Defence priorities. These include:

• The Defence Industry Development Strategy, released by the government in February 2024, includes essential details on the priorities for the Defence industry. The Strategy is focused on developing our sovereign defence industrial base and advanced manufacturing capabilities and capacity in the key areas identified through the Sovereign Defence Industrial Priorities.
• The Sovereign Defence Industrial Priorities identify those things we must be able to do in Australia to build, sustain and enhance defence capability. This includes being able to access the intellectual property, workforce and infrastructure in Australia to deliver the industrial capabilities we require, as well increase Defence’s understanding of Australia’s industrial capability and capacity.

Additional comments from Senator David Pocock

Response: the Australian Government supports in principle this recommendation.

As outlined above, the government’s $1.7 billion Energy Savings Package in the 2023–24 Budget helps finance electrification efforts, including through the Household Energy Upgrade Fund and the Social Housing Energy Performance Initiative. The government is also investing into Community Solar Banks to help up to 25,000 households who are unable to install their own solar systems benefit from renewable energy, including people who rent their homes, live in apartments or are unable to afford to install their own system.

In the 2024–25 MYEFO, the government committed an additional $500 million to expand the existing Social Housing Energy Performance Initiative (SHEPI) to help provide lasting cost of living relief for some of the most vulnerable households.

Electrification of the transport sector also provides a key opportunity for households to electrify. The government’s National Electric Vehicle Strategy, Driving the Nation Fund, and New Vehicle Efficiency Standard support the uptake of electric vehicles, including by supporting access to a wider range of electric vehicles and a national rollout of EV charging infrastructure and fleets to enable uptake.

The government works with states and territories to monitor electrification through a workstream under the National Energy Transformation Partnership. Ongoing reviews of opportunities for further support will be conducted through a coordinated, evidence‑based and systematic approach ensuring electrification is achieved in the most cost-effective way while avoiding duplication with jurisdictions.

The ARENA is also helping to strengthen the evidence base to inform acceleration of electrification across the economy. For example, in October 2024, ARENA announced $5.4 million of funding to trial a community led electrification project – Electrify 2515. This trial will empower consumers and improve understanding of behaviour and bill impacts to provide insights on the electrification process and experiences for government and industry. The government has since asked ARENA to consider funding more community electrification demonstration projects across the country.

Response: the Australian Government notes this recommendation.

If conducted, a sector assessment using the National Interest Framework will support government consideration and decision-making in relation to significant public investment. Sector assessments are not intended to inform all government decisions or replace other policy frameworks.

Any decision on support following a sector assessment will be a matter for government. While sector assessments will inform government decision-making, it is appropriate and necessary for the government to retain the flexibility to support its broader objectives.

Response: the Australian Government notes this recommendation.

The government introduced an amendment to the Note to clause 8 of the Future Made in Australia Bill during debate in the Parliament to clarify the consultation requirements for sector assessments to note the Commonwealth entities that the Secretary may consult. The entities are:

• the Australian Competition and Consumer Commission
• the Climate Change Authority
• the Commonwealth Scientific and Industrial Research Organisation
• Infrastructure Australia
• the Net Zero Economy Authority
• the Productivity Commission.

Response: the Australian Government notes this recommendation.

The government is committed to the robust and meaningful implementation of the Community Benefit Principles.

One key mechanism for the implementation of the Community Benefit Principles is through a Future Made in Australia Plan. A Future Made in Australia Plan, established by the Future Made in Australia Bill (as enacted), is a written plan that can be required by government to help maximise the broader benefits of investment in a Future Made in Australia.

The Future Made in Australia Bill, as enacted, allows for rules to be made to operationalise Future Made in Australia plans. Public consultation on the implementation of the Community Benefit Principles, including the application of Future Made in Australia Plans, closed on 2 February 2026. The consultation will help inform the development of the rules and the public guidance documentation to support implementation.

Response: the Australian Government notes this recommendation.

Australia, along with all parties to the Paris Agreement, has committed to the global goal of holding the increase in global average temperatures to well below 2°C of warming and pursuing efforts to limit the temperature increase to 1.5°C.

• The government has legislated its commitment to reduce emissions by 43% below 2005 levels by 2030, and to achieve net zero emissions by 2050.
• The government has submitted its Nationally Determined Contribution under the Paris Agreement to reduce emissions by 62–70% below 2005 levels by 2035.
• The government developed the Net Zero Plan for 2050, which is supported by 6 sectoral emissions reduction plans, capturing the full breadth of the economy.

The Future Made in Australia agenda is underpinned by Australia’s abundant renewable energy resources and our opportunity to build new clean energy industries. This positions us to produce and export renewable-energy embedded products and commodities, which will create economic opportunity, support our regional partners to achieve their emissions reduction commitments and in turn reduce global emissions.

Response: the Australian Government does not support this recommendation.

The Future Made in Australia Bill, as enacted, establishes a framework to support Australian Government consideration and decision-making in relation to significant public investment. It complements rather than replaces existing frameworks for Commonwealth investment, supporting better alignment of economic incentives with our national interests.

Response: the Australian Government notes this recommendation.

The Future Made in Australia Bill, as enacted, establishes Community Benefit Principles to ensure public investment and the private investment it attracts flows to communities in ways that benefit local workers and businesses. The principles are intended to ensure projects benefiting from government support deliver community benefits such as local job creation, support for local businesses, and skill development.

Public consultation on the implementation of the Community Benefit Principles closed on 2 February 2026.

Response: the Australian Government notes this recommendation.

The net zero transformation stream of the National Interest Framework relates to where a sector could have a sustained comparative advantage in a net zero global economy; and public investment is likely to be needed for the sector to make a significant contribution to emissions reduction at an efficient cost.

Considerations under the net zero transformation stream may include whether the sector:

• is energy-intensive and is capable of substantially reducing its greenhouse gas emissions in Australia or overseas emissions by taking advantage of Australia’s abundant renewable energy resources
• has output that embodies low emissions
• can help contribute to emissions reduction in other areas of the economy.

In addition, the government introduced amendments to clause 8 of the Future Made in Australia Bill during debate in the Parliament to require sector assessments to consider: the sector’s impacts on demand for fossil fuels and how those impacts can be managed in a way that is consistent with an orderly path to net zero transformation; and the decarbonisation potential in relevant global supply chains for the sector, including how those supply chains can contribute to the reduction of global greenhouse gas emissions.