The first auctions of the Low Carbon Hydrogen Development Program should take place by the end of the year, says the Treasury.

The Secretary of Economic Reforms of the Ministry of Finance, Carlos Colombo, said this Wednesday (17) that the federal government should issue the regulatory decree of Law 14.948/2024, and start the auctions of the Low Carbon Hydrogen Development Program (PHBC) this year. This program represents the federal government's economic boost to launch the first large-scale investments in the Brazilian hydrogen chain. R$ 18.3 billion will be offered over five years in the form of tax credits to be used by companies between 2030 and 2034. The financial volume will be offered progressively, with R$ 1.7 billion offered in the first year of the program, reaching R$ 5 billion in 2034. The objective of these tax resources, according to the secretary, is to help structure projects that can scale up national hydrogen production. “The PHBC auctions will be aimed at larger-scale projects. The 2024 legislation has already defined strategic sectors for the projects: cement, fertilizers, heavy transport, chemical and petrochemical industries, which are clearly suited to receive hydrogen. Our goal is to position Brazil as a decarbonization hub, both for Brazilian industry and for Latin America as a whole,” he stated, adding that “the first auction should take place in 2026, after the elections.” The PHBC will be available to both hydrogen producers and buyers in the Brazilian market. Thus, it will help structure the chain on both the supply and demand sides. But to participate, companies must be integrated into Rehidro, the special regime for hydrogen that is already in effect and establishes compensations that encourage companies to invest even more in innovations that can consolidate the industry in the country. According to Fernanda Delgado, president of the Brazilian Association of the Green Hydrogen Industry (ABIHV), the country has the opportunity to mobilize local production of methanol (currently 100% imported), green ammonia (with positive impacts on local fertilizer production), and ethanol itself (in this case, largely due to the mixtures that can be made to generate products such as Sustainable Aviation Fuel, a biogenic fuel for airplanes). “ABIHV has built an international agenda, over these almost three years, to showcase the potential of Brazilian projects for the coming years. There are projects that already have completed engineering, consolidated areas, and even established offtakers. The offtaker is the magic word today, the golden ticket for all of us here, producers or participants in the hydrogen development chain,” said the president of ABIHV.

This text was translated by machine from Brazilian Portuguese.