The Brazilian government has published Law No. 14,948/2024, establishing the legal framework for low-carbon hydrogen regulation. This new law grants the Brazilian National Agency for Petroleum, Natural Gas and Biofuels (ANP) the authority to regulate, authorize, and oversee the exploration and production of low-carbon hydrogen in Brazil.
Key Provisions of Law No. 14,948/2024
The new legal framework endows the ANP with several critical responsibilities to promote and manage the burgeoning low-carbon hydrogen sector. These include:
- Authorization for Production: The ANP is empowered to authorize the production of low-carbon hydrogen, ensuring compliance with the regulatory standards and considering the roles of other relevant agencies (Article 11, § 1°).
- Transfer of Authorization: The agency can oversee the transfer of production authorizations, ensuring a seamless transition and continuity in operations (Article 11, § 3°).
- Exemptions in Production Authorization: In specific scenarios where hydrogen is used as an input or produced in small volumes, the production authorization may be waived, subject to regulatory guidelines (Article 11, § 4°).
- Regulatory Sandbox and Pilot Projects: The law allows the use of regulatory sandboxes and pilot projects as interim regulatory solutions, facilitating innovation and adaptation until definitive regulations are established (Article 12).
- Exploration and Production Regulation: The ANP will regulate, authorize, and supervise the exploration and production of natural or geological hydrogen across the national territory, with the modalities of granting these rights to be defined in forthcoming regulations (Article 13).
- Comprehensive Operational Authorizations: The agency is also tasked with authorizing the various operations associated with hydrogen, including processing, storage, transportation, and commercial activities, prioritizing entities already authorized for production (Article 14).
Incentives and Programs for Low-Carbon Hydrogen
The new law is not just about regulation; it is also designed to stimulate the low-carbon hydrogen industry through various incentives and programs:
- National Low-Carbon Hydrogen Policy: This policy framework aims to guide the development and integration of low-carbon hydrogen within Brazil’s energy landscape.
- Regime Especial de Incentivos (Rehidro): The Special Incentives Regime for Low-Carbon Hydrogen Production provides financial and regulatory benefits to encourage investment and growth in the sector.
- Programa de Desenvolvimento do Hidrogênio de Baixa Emissão de Carbono (PHBC): This development program is geared towards fostering research, innovation, and industrial capacity in low-carbon hydrogen technologies.
Amendments to Existing Laws
To support the implementation of the new hydrogen framework, Law No. 14,948/2024 also introduces amendments to existing energy regulations:
- Law No. 9,427 (1996): This amendment aligns the legal text with the new provisions for low-carbon hydrogen, ensuring consistency and legal clarity.
- Law No. 9,478 (1997): Adjustments to this law further integrate low-carbon hydrogen within the broader energy regulatory framework, providing a cohesive approach to energy regulation.
Implications for the Future
The establishment of this legal framework marks a transformative moment for Brazil’s energy sector. By positioning the ANP at the helm of low-carbon hydrogen regulation, Brazil is not only committing to a greener future but also aiming to become a leader in the global hydrogen economy. The focus on regulatory clarity, innovation through sandboxes and pilot projects, and substantial incentives underscores the country’s dedication to sustainable energy development.
As the world increasingly turns to hydrogen as a key component of the clean energy transition, Brazil’s proactive approach sets a robust foundation for future growth. The collaboration between regulatory bodies, industry stakeholders, and policymakers will be crucial in realizing the full potential of low-carbon hydrogen, driving economic growth, and achieving environmental sustainability.