Congressman Arnaldo Jardim ©Mário Agra/Chamber of Deputies
Congressman Arnaldo Jardim ©Mário Agra/Chamber of Deputies
Brazil’s Chamber of Deputies has approved a green hydrogen certification and tax incentive package with a major amendment that increases the carbon intensity of low-carbon hydrogen by 75%.
Last November, the House passed Bill 2308/23 to establish the Low Carbon Emission Hydrogen Development Program (PHBC) to fund low-carbon hydrogen production, with planned subsidies.
Read more: How can South America seize its green hydrogen opportunity?
The bill was originally unveiled with a definition of low-carbon hydrogen set at 4kg of carbon dioxide equivalent (CO2e) per kg of hydrogen or less.
Having undergone debate in the lower house, that definition limit has been raised to 7kg CO2e/kg of hydrogen.
The limit is considerably higher than most regions around the world, with the EU’s set at 3kg CO2/kg and the US only offering incentives to projects producing hydrogen with 4kg CO2 or less.
“With current carbon capture and utilisation (CCUS) technologies, even the use of coal can result in 2kg of CO2 emissions if the capture efficiency is 90%,” a Chamber of Deputies announcement said.
“With natural gas, capture guarantees emissions five times lower, at 0.4kg CO2.”
However, a report by the US Department of Energy (DOE), suggested steam methane reforming (SMR) with a capture rate of 96.2% would deliver hydrogen with an emission intensity of 4.6kg CO2e/kg.
Read more: 45V emissions calculation rules could jeopardise blue hydrogen projects, associations warn
Congressman Arnaldo Jardim, claimed the modifications would make it “possible” to produce hydrogen from biofuels.
Congresswoman Fernanda Melchionna, slammed the decision, saying, “The logic of hydrogen production will be used with polluting sources.”
Other amendments included ending a limit on the maximum percentage of hydrogen from each company that can be used for exports, and senators introduced a maximum limit for obtaining tax subsidies.
Total subsidies of R$1.7bn ($312m) in 2028, R$2.9bn ($532m) in 2029, R$4.2bn ($770m) in 2030, R$4.5bn ($825m) in 2032 and R$5bn ($917m) in 2032 has been approved.
Brazil’s Ministry of Mine and Energy has said it will submit a work plan for the package within 90 days of the proposal being approved.
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