Brazil's New Legal Framework for Low-Carbon Hydrogen: An Overview
Key Ideas
- Law No. 14.948/2024 in Brazil establishes the National Policy for Low-Carbon Hydrogen and the Special Incentive Regime for its production.
- The law grants authority to ANP to regulate and supervise the hydrogen supply chain, while promoting industry incentives.
- Presidential veto to sections of the law was due to imprecision in wording but was accompanied by a proposal to rectify the issue.
- Deputy José Guimaraes proposed Bill of Law No. 3.027/2024 to address the legality concerns and explicit link between tax credits and CSLL.
On August 2, 2024, Brazil sanctioned Law No. 14.948/2024, focusing on low-carbon hydrogen regulation. This law establishes the National Policy for Low-Carbon Hydrogen in the country, alongside the creation of the Special Incentive Regime for its production, aimed at fostering industry growth. The law also designates the National Agency of Petroleum, Natural Gas and Biofuels (ANP) as the regulatory body overseeing the hydrogen supply chain. A presidential veto on sections related to the Low Carbon Hydrogen Development Program was due to unclear wording around tax credits, raising concerns about their legality. In response, Deputy José Guimaraes introduced Bill of Law No. 3.027/2024 to ensure a clear link between the tax credits and the Social Contribution on Net Profit (CSLL), offering solutions for the utilization of these incentives.