O PHBC (Low Carbon Hydrogen Development Program) was sanctioned and the resolution was published in the DOU (Official Gazette of the Union), in the last Friday (27).
A new Law No. 14.990 / 2024 grants R$18,3 billion in tax incentives for the production and purchase of green hydrogen in the country.
They credit should be granted between 2028 and 2032, with annual credit limits of R$1,7 billion in 2028, R$2,9 billion in 2029, R$4,2 billion in 2030, R$4,5 billion in 2031 and R$5 billion in 2032, through CSLL (Social Contribution on Net Profit).
A new law is derived from the PL 3.027 / 2024, which was approved by the Senate on September 4, after the executive vetoed the matter in the Low Carbon Hydrogen Regulatory Framework, present in the Law 14.948 / 2024.
The program has different objectives, including:
- Hydrogen development low carbon emissions and renewable hydrogen;
- for actions in favor of energy transition;
- Establishment de objective goals for the development of the domestic low-carbon hydrogen market;
- Application of incentives for decarbonization with the use of low-carbon hydrogen in industrial sectors that are difficult to decarbonize, such as fertilizers, steel and petrochemicals;
- In addition to promoting the use of hydrogen low carbon emissions in heavy transport.
Requirements necessary for granting credit
Legal, to have access to tax credit, there must be competition for the selection of production projects or buyers who will have credit, in the form of a subsidy to amortize the price difference between hydrogen and other fuel sources.
Both for as producing companies as for product buyers, it is necessary that the producer is or has been a beneficiary of the Rehydro (Special Incentive Regime for Low Carbon Emission Hydrogen Production).
They will have preference to the granting of tax credits in decreasing amounts over time, the projects that predict lower intensity of greenhouse gas emissions emitted by hydrogen production and have greater potential for densifying the national value chain.
Os recipients may use the credits to make up for values to pay From others federal taxes or, if there are no taxes to offset, request reimbursement to be made within 12 months after the request.
If the contemplated not to implement the project benefited or if he is not according to Regulation, you can pay a fine of up to 20% of the value of the credit allocated to the project. The beneficiary will also have to return an amount equivalent to the credits that were unduly reimbursed or compensated.
O Chef shall publish report to Olos technology evaluation and the results PHBC, SBCH2 (Brazilian Hydrogen Certification System) and Rehidro.
O document must contain the list of projects who requested qualification, the qualified projects and the results of the monitoring and inspection actions. If there are istrative and monetary sanctions, they must also be present.
ABHIC Position
A ABHIC (Brazilian Association of Hydrogen and Sustainable Fuels) said, in a note, that the sanction of the PHBC Law is an important milestone for the development of hydrogen e sustainable fuels in Brazil, especially due to the credit that will be offered to producers and buyers of green hydrogen between 2028 and 2032.
Bianca Bez, legal director of the Association, said that with the enactment of the Law, ANP (National Agency of Petroleum, Natural Gas and Biofuels) will need develop regulations detailed to implement the new legislation.
This regulatory process should involve:
- Establishment of technical standards, with the definition of technical standards for the production, storage and distribution of low-carbon hydrogen, ensuring safety and efficiency;
- realization of public inquiries to include diverse market perspectives and ensure that regulation is comprehensive and balanced;
- Economic and market impact, as regulation needs to consider compliance costs for market agents, potentially influencing the final price of hydrogen and the competitiveness of the sector.
Yes, Leandro Zannoni, ABHIC's regulatory director, said that the ANP must promote authorizations for production of hydrogen, respecting the attributions of the other regulatory agencies.
Zannoni adds that it is essential that the Federal Executive Branch previously edit the regulation defining the powers of the regulatory agencies.
“A ANP will exercise the regulation of activity exploration and production of natural hydrogen in the national territory. Thus, it is already up to it, by means of regulation, to establish the types of concession that will be practiced for the purposes of exploration and production of natural hydrogen”, he comments.
“A ANP must also promote authorizations for activities related to the loading, processing, treatment, import, export, storage, packaging, transportation, transfer, resale and commercialization of hydrogen, its derivatives and carriers”, he adds.
Main regulatory challenges
According to the legal director of ABHIC, regulatory process by ANP presents several challenges, including technical complexity and technological innovation; inter-institutional coordination and cost of implementation and monitoring.
Bianca further states that the ANP will face challenges in the development of a regulation that balances technological innovation, compliance costs and regulatory security.
"It becomes essential that regulation maximizes economic efficiency, promote the sector’s competitiveness and avoid unnecessary barriers to entry, ensuring a dynamic and sustainable market”, he comments.
Zannoni says that the Laws 14.948/2024 and 14.990/24 are a big step towards development do hydrogen market green in Brazil.
“A Law No. 14.948 / 2024, that established the legal framework for hydrogen low carbon emissions, must be subject to federal regulation and implementation by the ANP. Because the Law represents a historical paradigm for the development of the Brazilian energy sector”, comments Zannoni.
“It inserts Brazil into the context of global energy transition towards sustainable sources, in addition to fulfilling the climate goals agreed upon globally. There is alignment with the values of sustainability, energy efficiency and socioeconomic development”, he points out.
Already Law 14.990 / 24, in turn, establishes the PHBC (Low Carbon Hydrogen Development Program), presenting measures for the promotion of productive chain do green hydrogen in Brazil .
"The tax breaks are fundamentals to foster production and marketing low-carbon hydrogen. They aim to reduce the cost of green hydrogen, making it competitive,” says the director.
Os challenges to be overcome in this regard are: information asymmetry and harmonization with international standards.
"In short, regulation is essential to correct market failures, protect consumers and encourage competition. However, it must be carefully designed and implemented to avoid technical and economic problems with the functioning of the market”, the note states.
“A key to successful regulation is balance: it must be flexible enough to adapt to market and technological changes, but rigorous enough to guarantee legal and economic security”, he continues.
“ Furthermore, the training of regulatory agencies, transparency and inter-institutional coordination are crucial for the success of the regulatory framework”, he concludes.
Read also
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