Brazil regulates low carbon hydrogen policy to drive energy transition

The Brazilian government has regulated the National Low Carbon Hydrogen Policy through Decree No. 13.096/2026, aiming to accelerate the energy transition and reduce industrial greenhouse gas emissions. The new framework establishes strategic instruments, including the Special Incentive Regime (Rehidro), which offers zero-rate PIS/Pasep and Cofins on inputs and services for certified sustainable projects, and the Low Carbon Hydrogen Development Program (PHBC), which provides up to R$18.3 billion in tax credits via reverse auctions between 2030 and 2034.

The National Association of the Green Hydrogen Industry (ABIHV) projects investments of R$115 billion across 13 projects by 2030, primarily in the Northeast region. These projects include green ammonia, fertilizers, and e-methanol. While the decree provides greater institutional clarity and governance for the Brazilian Certification System, industry experts note remaining challenges, such as energy costs, infrastructure gaps, and potential mismatches between tax laws and the new decree regarding fiscal exemptions.

Beneficiary companies must also meet specific requirements, including investing 1% of project value into sustainable development and 1% into research and innovation, alongside varying national content requirements for goods and services.