Discussions on hydrogen as a low-carbon energy source are growing in Brazil, resulting in several business opportunities in Brazilian states, which are already moving forward in their legislation on the subject. Here, we provide an overview of the states’ legislation, as well as of federal bills under discussion at the Brazilian National Congress.
LEGISLATION
1) State of Bahia
Decree No. 21,200 of March 2, 2022
- Provides for the State Plan for the Green Hydrogen Economy (PLEH₂V);
- Defines Green Hydrogen as the one produced from renewable energy sources or renewable raw materials;
- H₂V as a raw material in industrial processes and as an energy input, especially in industry, urban mobility, and transportation;
- Recognition of the H₂V production chain as an essential element for the modernization and increased competitiveness of the state's economy;
- Emphases the importance of an agile and safe business environment for attracting productive investments and establishing national and international partnerships; and
- Subprograms of (i) Research, Development, and Innovation and (ii) Market Promotion.
2) State of Espírito Santo
Decree No. 5,416-R of June 28, 2023
- Provides for the Renewable Energy Generation Program of the Sustainable Hydrogen Chain in the state of Espírito Santo - GERAR Hidrogênio;
- Tax incentives for companies engaged in the manufacture of renewable energy generating equipment, in particular solar, offshore and/or onshore wind and biomass;
- Fosters the creation of a state ecosystem for the generation and cogeneration of energy from biomass and biofuels, in particular from sustainable hydrogen; and
- To achieve the objectives of the Decree, the Executive Branch may regulate public policies and government measures.
3) State of Goiás
Law No. 21,767 of January 2, 2023
- Provides for the State Policy for Green Hydrogen;
- Encouragement of the adoption of tax and credit instruments that enable the production and acquisition of equipment and materials used in hydrogen production and application systems; and
- Encouragement of the signing of agreements with public and private institutions, as well as the financing of research and projects.
4) State of Paraná
Law No. 21,767 of January 2, 2023
- Provides parameters to encourage the use of renewable hydrogen;
- Encourages the use of renewable hydrogen in its various applications and, in particular, as an energy source and production of agricultural fertilizers;
- Promotion of studies in regulatory sandboxes, to develop production plants and services for hydrogen with low carbon production, for the implementation of solutions and technological novelties.
5) State of Paraíba
Law No. 21,454 of May 3, 2023
- Provides for the State Public Policy on green hydrogen;
- Encourages the use of renewable hydrogen in its various applications and, in particular, as an energy source and production of agricultural fertilizers;
- Promotion of studies in regulatory sandboxes, to develop production plants and services for hydrogen with low carbon production, for the implementation of solutions and technological innovations.
Federal Bills
1) Bill No. 725/2022: it regulates the insertion of hydrogen as an energy source in Brazil, and establishes parameters to encourage the use of sustainable hydrogen. The Brazilian National Agency for Oil, Natural Gas, and Biofuels (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis - ANP) shall regulate, authorize and supervise the activity regarding the hydrogen chain, including production, import, export, storage, stockpiling, standards for use and injection at delivery points or exit points.
National Goals
Addition of hydrogen at the point of delivery or exit point in pipelines at minimum percentages of:
a) 5% from 2032 onwards (60% Sustainable Hydrogen)
b) 10% from 2050 onwards (80% Sustainable Hydrogen)
2) Bill No. 1878/2022: provides for the regulatory policy for the production and use of Green Hydrogen for energy purposes.
3) Bill No. 3173/2023: creates the Prohidroverde - National Green Hydrogen Program, aimed at fostering the production, distribution, and use of hydrogen generated from renewable energy sources.
Main objectives:
I – promoting the production of clean energy, including, where applicable, through tax incentives and public financing at differentiated rates;
II - encouraging research related to the development of clean energy;
III - creating and structuring clean energy study centers throughout the national territory; and
IV - widely publicizing the advantages of using clean energy.
