

The Senate Plenary approved, with amendments, the House bill that establishes the regulatory framework for the production of low-carbon hydrogen and determines fiscal and financial incentives for the sector (PL 2,308/2023). Senators’ amendments pending for separate voting will be considered in a session yet to be defined.
After the vote is completed, the matter will have to return for a new analysis by the Chamber of Deputies. The project sets rules and benefits to stimulate the fuel hydrogen industry in Brazil.
The goal is to contribute to decarbonizing the Brazilian energy matrix. PL 2,308/2023 creates the National Policy for Low-Carbon Hydrogen, which includes the National Hydrogen Program; the Low-Carbon Hydrogen Development Program (PHBC).
The rapporteur was Senator Otto Alencar (PSD-BA), who made changes to the original text and accepted amendments to the project.
According to the approved text, the production of low-carbon hydrogen will be encouraged, including that obtained from renewable sources, such as biomass, ethanol, and other biofuels, and electrolytic hydrogen.
About this matter, which I consider of great importance to the country, in this energy transition, Brazil still does not have the regulation, the regulatory framework.
I believe that with the Senate’s approval, with the Chamber’s approval, we will be able to start a new plant for clean energy production in the country because we already have it — said Otto.
According to the approved text, the tax and fiscal incentives of Rehidro will be valid for five years, with goals, objectives, and public monitoring.
Rehidro will suspend the incidence of PIS/Pasep and Cofins, including imports, on the purchase of raw materials, intermediate products, packaging, stocks, and construction materials made by eligible low-carbon hydrogen producers.
In addition to low-carbon hydrogen-producing companies, those engaged in the transportation, distribution, packaging, storage, or commercialization of the product may participate in Rehidro.
Those producing biogas and electrical energy from renewable sources intended for hydrogen production will also benefit.
The Executive Regulation will establish requirements for entry into Rehidro, such as a minimum investment in research, development, and innovation and a minimum percentage of national origin goods and services in the production process.
Companies benefiting from Rehidro will be able to issue debentures subject to lower taxation, known as incentivized debentures, making them more attractive to investors.
Debentures are credit securities issued by companies and traded in the capital market to raise funds for their projects. Gains from individual debentures are tax-free, while gains from legal entities are subject to a 15% tax.
Certification The approved text also creates the Brazilian certification system, to be carried out by a competent authority attesting to the characteristics of the production process, input used, production location, information on the hydrogen life cycle, and the amount of carbon dioxide emitted.
According to the text, the guidelines for implementing incentive policies will be defined by the National Hydrogen Program Management Committee (Coges-PNH2).
It will be composed of up to 15 representatives from federal Executive agencies, a representative from states and the Federal District, a representative from the scientific community, and three representatives from the productive sector.
The National Agency of Petroleum, Natural Gas, and Biofuels (ANP) will be responsible for authorizing the production, importation, transportation, exportation, and storage of hydrogen. However, production can only be allowed to Brazilian companies based in the country.
Tax CreditsA tax credit for the Social Contribution on Net Income (CSLL) will be granted for low-carbon hydrogen and its derivatives produced in the country, provided that the projects stimulate technological development and contribute to regional development.
The credit will be granted within 60 days of the sales invoice and can be used to pay any federal tax. If there is not enough debt for the offset, the credit will be refunded in cash.
However, the benefit cannot exceed 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, and must be included in the Federal Budget.
Senator Cid Gomes (PSB-CE) praised the project, believing it will allow Brazil to be a leader in this market. He celebrated the forecast of R$18.3 billion in tax benefits over five years.
What I desire is for Brazil to be a major consumer of hydrogen; I want us to produce hydrogen to sell here to Brazil and to replace our trains, replace our cargo trucks, even replace passenger cars with this energy modality that does not emit carbon — said Cid Gomes.
Senators Eduardo Braga (MDB-AM), Esperidião Amin (PP-SC), Vanderlan Cardoso (PSD-GO), Jaques Wagner (PT-BA), Astronaut Marcos Pontes (PL-SP), and others also highlighted the importance of the project for the country’s future.
InfrastructureThe approved text amends Law 11,488 of 2007 to include Rehidro companies in the Special Incentive Regime for Infrastructure Development (Reidi), currently benefiting companies in the transportation, ports.
These companies are exempt from paying PIS/Pasep and Cofins, also on imports, for the sale or importation of new machinery, equipment, instruments, and construction materials.
Sources of FundingThe project creates the Low-Carbon Hydrogen Development Program (PHBC) with the aim of constituting a funding source for energy transition through the use of low-carbon hydrogen.
Among the program’s objectives will be defining specific goals for the development of the domestic low-carbon hydrogen market and incentives for the use of low-carbon hydrogen in industries that are difficult to decarbonize, such as fertilizer.
QualificationTo be included in Rehidro, low-carbon hydrogen producers must use a minimum percentage of domestically sourced goods and services in the production process, yet to be defined.
They must also limit the portion of their production destined for the foreign market and prove investments in research and innovation.
Enterprises can become eligible within up to five years to enjoy the benefit, except for those taxed under the Simples Nacional regime, which are not entitled to join the system.
Companies located in Export Processing Zones (EPZs) can also participate without giving up existing fiscal benefits.