Brazil's National Low-Carbon Hydrogen Policy: A Step Towards Sustainable Energy
Key Ideas
  • Law 14948/2024 establishes the National Low-Carbon Hydrogen Policy in Brazil, promoting the production and use of low-carbon and renewable hydrogen.
  • The policy includes the creation of the Brazilian Hydrogen Certification System (SBCH) and the Special Incentive Regime for Low-Carbon Hydrogen Production (Rehidro) to foster technological development and competitiveness.
  • Rehidro offers tax incentives such as the suspension of PIS/Pasep and Cofins for five years for activities related to low-carbon hydrogen.
  • Regulatory competence for low-carbon hydrogen production lies with the National Agency for Oil, Natural Gas and Biofuels (ANP) and the National Electric Energy Agency (ANEEL).
On August 2, 2024, Brazil approved Law 14948/2024, which establishes the National Low-Carbon Hydrogen Policy, creating a legal framework for the production and use of low-carbon hydrogen. The policy aims to integrate low-carbon hydrogen into the country's National Energy Policy through the competence of the National Agency for Oil, Natural Gas and Biofuels (ANP). The Law introduces the Brazilian Hydrogen Certification System (SBCH) and the Special Incentive Regime for Low-Carbon Hydrogen Production (Rehidro), encouraging competitiveness and industrial development in the hydrogen sector. The Law defines different types of hydrogen, including low-carbon emission hydrogen, renewable hydrogen, and green hydrogen, emphasizing the importance of reducing greenhouse gas emissions. Rehidro allows legal entities involved in low-carbon hydrogen production to benefit from tax incentives like the suspension of certain taxes for five years. Moreover, the Law establishes the Brazilian Hydrogen Certification System, promoting transparency in the hydrogen production chain and regulating governance among producers, buyers, and regulatory authorities. ANP is tasked with regulating and inspecting low-carbon hydrogen production, with support from ANEEL for the electric energy aspects of the sector. Despite a partial veto on some articles related to tax credits, the Law signifies a significant step towards sustainable energy practices in Brazil, aligning with global efforts to reduce carbon emissions and promote renewable energy sources.
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