Brazil is making strides towards energy transition as its Congress passed the Bill of Law No. 2,308/2023, the Hydrogen Legal Framework, on July 11, 2024. President Luiz Inácio Lula da Silva is expected to sanction the bill to become law in the coming days.
In addition to the nation's commitment to its own decarbonization targets, Brazil is also positioned as a potential global exporter of low-carbon hydrogen and its derivatives, due to its predominant and competitive renewable energy-generation matrix.
THE KEY PROVISIONS OF THE BILL ARE:
1 Definitions of "Low-Carbon Hydrogen", "Renewable Hydrogen" and "Green Hydrogen";
2 Designation of the Brazilian Agency of Petroleum, Natural Gas and Biofuels (ANP) as the regulatory body, with authority to regulate hydrogen chain activities and issue authorizations for hydrogen production;
3 Establishment of the National Low-Carbon Hydrogen Policy;
4 Creation of subsidies for the development of the Low-Carbon Hydrogen industry, through the Low-Carbon Hydrogen Development Program (PHBC);
5 Creation of the Special Regime of Incentives to the Low-Carbon Hydrogen Production (REHIDRO); and 6 Creation of the Brazilian Hydrogen Certification System (SBH2).
INSIDE THE PROVISIONS
NATIONAL POLICY OF LOW CARBON HYDROGEN
The Hydrogen Legal Framework establishes the National Policy of Low Carbon Hydrogen as a nationally applicable instrument to boost development of public policies on lowcarbon hydrogen. Federal, state, and local authorities are responsible for implementing the National Policy of Low Carbon Hydrogen in accordance with their respective jurisdictions.
The National Low-Carbon Hydrogen Policy identifies 23 objectives. In general, these objectives aim to promote the energy transition through the production of Low-Carbon Hydrogen for both domestic and international markets, encouraging the further development of the supply chain of Low-Carbon Hydrogen in Brazil.
The bill also establishes the following principles of the National Low Carbon Hydrogen Policy:
- Respect for technological neutrality in the definition of incentives for the production and use of low-carbon hydrogen;
- Competitive inclusion of low-carbon hydrogen in the Brazilian energy matrix for its decarbonization;
- Predictability in the formulation of regulations and incentives for market expansion;
- Rational use of the existing infrastructure dedicated to energy supply; and
- Promotion of research and development for low-carbon hydrogen.
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