SUBSIDIES

REPLIES TO QUESTIONS POSED BY INDIA[1] REGARDING THE
2023 NEW AND FULL NOTIFICATION OF AUSTRALIA[2]

The following communication, dated and received on 14 April 2025, is being circulated at the request of the delegation of Australia.

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Australia thanks India for its questions regarding the 2023 new and full notification of Australia and provides the following information in response.

Question 1

13.10 Trade Alliance Program

a._    Given that one of the stated objectives of the Trade Alliance Program is to assist businesses in developing solutions to export challenges, does the Program provide benefits, prioritization, or support for businesses or associations that demonstrate plans or targets for expanding exports?

Reply:

The purpose of the Trade Alliance Program was to support Tasmanian industry associations and regional organisations to facilitate collaborative projects whereby multiple Tasmanian businesses build on their competitive advantage and/or develop solutions to trade and export challenges. The program delivered through industry associations the opportunity for clustering and aggregating exports to create a more competitive freight and logistics business model.

b._    Please provide information on any criteria or mechanisms applied to determine eligibility for such support under the Program?

Reply:

Applications were subject to a merit assessment by the Department, where the following criteria was considered:

·_        The degree to which an application supports a specific collaborative trade opportunity, that is clearly identified, well-researched and substantiated and can be completed prior to 15 June 2021.

·_        The degree to which the applicant demonstrates its suitable project management, business development and trade experience and success.

·_        The degree to which the Project demonstrates net economic benefit to Tasmania.

·_        The number of Tasmanian businesses the Project supports; with projects supporting a higher number of Tasmanian businesses more favoured.

·_        The value for money presented in the application, where applications demonstrate an opportunity for increased trade outside of Tasmania.

·_        The degree to which the Project, as detailed in the application, aligns with the objectives of the Program and the Tasmanian Trade Strategy.

Question 2

1.4 Hydrogen Headstart

Australia's notification outlines that the Hydrogen Headstart Program aims to accelerate the development of a domestic hydrogen industry, and "reflects a responsive approach to global market signals". Further, the Program employs a "competitive process" to determine the subsidy amount for each selected project.

In this light, could Australia clarify:

a._    What is the "competitive process" used to determine the amount of the subsidy and how will it be employed in implementing the program?

Reply:

The Australian Government announced the Hydrogen Headstart program in May 2023, and opened Round 1 of the program for expressions of interest in October 2023. The Australian Government subsequently announced funding for a second round of Hydrogen Headstart in May 2024. The answers provided below relate to Round 1 of Hydrogen Headstart. While the Government expects both rounds to operate similarly, the final design of Round 2 has not yet been settled, and the program's eligibility and merit criteria are subject to change in the second round. Further details on Hydrogen Headstart Round 2 will be communicated by the Australian Government in 2025.

Hydrogen Headstart Round 1 is administered by the Australian Renewable Energy Agency (ARENA) in accordance with the _program's guidelines, which were jointly developed by ARENA and the Department of Climate Change, Energy, the Environment and Water (DCCEEW). The program is being delivered as a competitive process. Applications to the program must have been submitted by the specified deadlines and eligible applications ranked by ARENA based on an assessment against the merit criteria. Applications with the highest rankings at the completion of the assessment of full applications would be offered funding, subject to: proposals meeting the required standard of merit; the total funding allocation; and a portfolio approach (that is, an otherwise meritorious or higher ranked project may not be elected to be funded if the aims or outcomes of that project are the same as, or similar to, the aims and outcomes of another project that is intended to be funded through the Program or has previously been funded by ARENA or other relevant funders).

b._    Is the grant under this program tied to local value-addition requirements?

Reply:

Hydrogen Headstart Round 1 does not include any eligibility criteria related to local content requirements. Projects are assessed against several merit criteria in the _program's guidelines, which include:

·_        Merit Criterion A considers the potential for the Project to provide benefit to the broader economy and community beyond the economic return to the Project, including employment opportunities, business for local suppliers and First Nations employment opportunities.

·_        Merit Criterion C also includes the extent to which the Project uses local supply chains, including sourcing of domestically supplied services to deliver the Project. Use of local supply chains may therefore support a higher assessment of merit relative to this criterion, however, the overall merit of the application will be determined based on the equally weighted assessment against all Merit Criteria.

c._    Are foreign companies based in Australia eligible to avail the benefits of this program?

Reply:

Yes. Foreign companies are eligible as long as they operate an Australian entity incorporated under Australia's Corporations Act 2001 (Cth), the hydrogen production occurs in Australia, and the project meets all other eligibility criteria outlined in the _program guidelines.

d._    Whether there are direct or indirect terms or conditions in the Program that encourage beneficiaries to export hydrogen or derivative products?

Reply:

In line with the Eligibility Criteria noted in Part 2 of the _program guidelines, all end uses of hydrogen or hydrogen derivative products, including export, are eligible, subject to all other Eligibility Criteria being met. The program's merit criteria do not aim to encourage beneficiaries to export hydrogen, but they also do not aim to limit the capacity of a beneficiary to export hydrogen. As mentioned above in response to question a), hydrogen projects are assessed against merit criteria which consider the potential for the project to provide benefit to the broader Australian economy and community.

Question 3

3.2 Accelerate Adoption of Wood Processing Innovation Program

In view of the objective mentioned by Australia in its notification that the stimulus under this Program is "in response to global demand for wood and wood products which is expected to increase significantly over the next 25 years". Does this Program prioritize or indirectly incentivize export‑oriented projects or businesses? If so, could Australia clarify the mechanisms by which export-oriented initiatives may be prioritized or incentivized?

Reply:

No, the Program does not prioritise or indirectly incentivize export-oriented projects or businesses.

The program's priority is to enhance the forestry sector's ability to supply more of Australia's wood demands into the future which will improve domestic sources of in-demand products, make better use of existing timber supplies and allow industry to be more resilient to future supply chain issues.

Question 4

11.28 Advance Queensland Ignite Ideas Fund

a._    Given that the policy objective of the Advance Queensland Ignite Ideas Fund is to provide support to small to medium businesses with high growth potential to compete in global markets, could Australia clarify whether the Fund includes specific criteria or performance requirements linked to achieving success in the global markets?

Reply:

The policy objective is to assist small to medium businesses compete in domestic and global markets. Program applicants could therefore be proposing to compete in only domestic markets, only global markets, or both markets. The criteria are therefore generic in terms of market access. If a business is successful however, performance requirements are negotiated around the markets specifically targeted by individual businesses.

b._    Further, are there any eligibility criteria or related funding priorities within the Advance Queensland Ignite Ideas Fund to favor projects that demonstrate high export potential?

Reply:

No. Applications are assessed on a range of factors such as the level of innovation, market potential, market readiness, project viability, organisational capability, and benefits to Queensland. Export potential would be considered under market potential, but is not a stand-alone priority criterion.

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