Australia announces immediate tax deduction for geothermal exploration
The Australian government announces an immediate tax deduction for the exploration of geothermal energy sources from July 2012, as part of resource tax reforms.
Reported from Australia, the country’s government announced an immediate tax deduction for the exploration of geothermal energy sources from July 2012. This was announced as part of the government’s resource tax reforms.
“Resources and Energy Minister Martin Ferguson said existing income tax law provided a tax deduction for expenditure incurred when exploring or prospecting for minerals, petroleum or quarry minerals.
Updating the tax law by extending the definition of exploration, would ensure exploration for geothermal energy received the same treatment as traditional hydrocarbon energy sources.
He said this was consistent with the advice provided by the Policy Transition Group’s exploration report which the government also announced its acceptance of on Thursday.
“The amendment to the tax law is a win for the geothermal industry in Australia that will help remove barriers to investment in geothermal energy and improve the economics of geothermal exploration,” Ferguson said.
“The potential importance of geothermal to Australia’s energy future mix is significant with estimates from Geoscience Australia suggesting that if we were able to extract just one percent of Australia’s geothermal energy, it would be equivalent to 26 000 times Australia’s total annual energy consumption.”
Ferguson noted that geothermal had the possibility to provide baseload renewable energy in Australia, and could help reduce the country’s greenhouse gas emissions.
“The government has also given its in-principle support to provide a more sustainable stream of funding for Geoscience Australia.
“Through these measures the government is helping the geothermal industry realise its potential and supporting exploration of Australia’s mineral and petroleum resources.”
As part of the government’s A$5-billion Clean Energy Initiative, the Australian government currently provides support for the development of geothermal energy through the Australian Centre for Renewable Energy and has committed more than A$200-million in direct funding to accelerate geothermal energy technology development, demonstration and deployment in Australia, and leverage investment of A$720-million.
Ferguson said the tax deduction would provide an additional boost to encouraging the development of geothermal energy and help ensure Australia was at the forefront of geothermal energy development.”
Source: Mining Weekly