With the approval of the legal framework for Low Carbon Hydrogen (Law No. 14.948/24), Brazil took an important step towards consolidating the green hydrogen industry, considered strategic for the global energy transition.
However, structural and regulatory challenges still threaten the viability of the projects already announced in the country. Among the main obstacles is the limited infrastructure for electricity transmission, a central point of the new proposal defended by ABIHV (Brazilian Association of the Green Hydrogen Industry).
The entity proposes holding an exclusive transmission auction, scheduled for 2026, with the contracting of an additional 4 GW of capacity, exclusively intended to meet the future demand of the green hydrogen chain.
According to ABIHV, these assets should come into operation by 2029. Otherwise, Brazil runs the risk of lo to R$80 billion in investments and around 30 jobs between 2025 and 2030.
“Access to the transmission network is currently a bottleneck that could compromise the implementation of the green hydrogen industry in the country,” the association highlights in a recent report.
The concern is not limited to the connection of new loads — such as data centers and industrial hydrogen plants — but also to the recurring cuts in renewable generation, especially in the Northeast, which cause legal uncertainty and drive away investors.
Reliance on renewable electricity is a determining factor for the competitiveness of green hydrogen. It is estimated that between 70% and 75% of the production cost is related to electricity consumption.
In this context, Brazil has significant comparative advantages, with a predominantly renewable electricity grid and great potential for wind and solar expansion. However, these advantages could be nullified if clean energy is unable to reach industrial production centers due to a lack of adequate transmission infrastructure.
Investments already announced total more than R$65 billion
According to a survey conducted with ABIHV , R$65,67 billion in investments have already been announced for projects to produce green hydrogen, ammonia, methanol and nitrogen fertilizers. The main projects are located in the states of Ceará, Pernambuco and Minas Gerais, with the participation of companies such as Fortescue, Casa dos Ventos, European Energy, Atlas Agro, Voltalia and Qair.
Despite the robustness of the investment plans, the lack of a complete regulatory framework and uncertainty regarding access to electrical infrastructure put the projects on hold. ABIHV emphasizes that transmission planning needs to consider the installation of large industrial hubs in advance.
To make the green hydrogen industry viable in Brazil, in addition to the transmission structure, the sector depends on the regulation of the new law, the creation of financing instruments, the stimulation of national demand and the organization of the export chain of its by-products.
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