Technical Note: Low Carbon Hydrogen Legal Framework
Low carbon hydrogen is strategic for the decarbonization of sectors such as steel and cement and can position the country as a global provider of sustainable solutions.
The law defines specific criteria for low-carbon hydrogen, ranging from water electrolysis with renewable energy (0 to 3 kg CO2/kg H2) up to production from biomass and ethanol (~7 kg CO2/kg H2). The ANP will be responsible for regulation, while the Rehydro will offer tax incentives.
Governance Tools:
- National Hydrogen Program (PNH2) – Managed by Coges-PNH2, with the participation of representatives from the Executive, states, DF, scientific community and productive sector.
- Low Carbon Hydrogen Development Program (PHBC) – Details vetoed, but in progress at Bill 3.027/2024.
- Brazilian Hydrogen Certification System (SBCH2) – Voluntary certification to promote sustainability.
Tax Credits: The vetoed section provided for up to R$ 18 billion in tax credits between 2028 and 2032, but the Bill 3.027/2024 maintains the forecast with prioritization criteria based on reduction of GHG (greenhouse gas) emissions.
O CEBDS considers the sanction of this law a crucial step for the low-carbon hydrogen market in Brazil and highlights the importance of considering the GHG emissions intensity as a criterion of granting of tax credits.