Brazil has R$ 24.6 billion in tax incentives stalled while the green hydrogen sector has been waiting for 18 months for decrees that could unlock billion-dollar projects, especially in the Northeast, and define the future of the new clean industry in the country.
The green hydrogen sector in Brazil entered 2026 still waiting for the decrees needed to regulate the tax incentives approved in 2024. According to Folha de S.Paulo, the industry had been waiting for about a year and a half for the publication of rules capable of unlocking R$ 24.6 billion in tax benefits.
The wait has a clear origin. On August 2, 2024, Law 14,948 was sanctioned, establishing the legal framework for low-carbon hydrogen and creating Rehidro, a special incentive regime for projects in the sector. On September 27, 2024, Law 14,990 was sanctioned, instituting the PHBC, a tax credit program for low-carbon hydrogen.
The problem is that, even with the laws approved, the market still depends on a decree to know how the benefits will be applied in practice. Without this step, companies remain without the necessary security to close contracts, seek financing, and make final investment decisions.
The wait began after the laws were sanctioned in 2024
The impasse is not due to the absence of a law. Brazil has had a legal framework for low-carbon hydrogen since August 2024 and also approved, in September 2024, the tax credit program to encourage national production.
What is missing is the regulation. It is the decree that should detail how companies can access the benefits, what criteria will be used, how the auctions will work, and how the projects will be selected.
According to Folha de S.Paulo, the decrees should regulate two fronts. The first is Rehidro, which suspends federal taxes for low-carbon hydrogen projects. The second is the tax credit program for producers and buyers of the fuel participating in auctions organized by the government.
This difference is essential to understand the delay. The laws were approved in 2024, but the projects still depend on operational rules to advance.
R$ 18.3 billion depend on the tax credit program
The most anticipated part by the sector involves the PHBC, Low-Carbon Hydrogen Development Program.
Law 14,990 provides for R$ 18.3 billion in tax credits for commercialization operations of low-carbon hydrogen and its derivatives produced in the national territory.
According to the current wording of the law, after a subsequent amendment, these tax credits will be granted for operations carried out between January 1, 2030, and December 31, 2034. In other words, the incentive targets a future window but needs regulation beforehand so that companies can structure their projects.
According to Folha de S.Paulo, on June 16, 2026, Carlos Colombo, program director of the Secretariat of Economic Reforms of the Ministry of Finance, stated that the government expected to publish that month the decree related to the tax benefits of R$ 18.3 billion.
Another R$ 6.3 billion is linked to Rehidro
In addition to the R$ 18.3 billion in tax credits, the total amount of R$ 24.6 billion cited by Folha includes another R$ 6.3 billion related to the suspension of federal taxes.
This block is linked to Rehidro, a special regime created to stimulate low-emission hydrogen projects. In practice, the mechanism can reduce costs in purchasing equipment, machinery, materials, and inputs used in the implementation of the enterprises.
For a still nascent industry, this type of incentive weighs heavily. Green hydrogen projects require electrolyzers, renewable energy, transportation infrastructure, industrial area, long-term contracts, and robust financing.
Without tax clarity, the investor does not know exactly what the final cost of the project will be. And without this final cost, the final investment decision becomes more difficult.
R$ 63 billion projects await security to advance
The regulatory wait directly affects a billion-dollar portfolio already announced in the country. ABIHV, the Brazilian Association of the Green Hydrogen Industry, reported that its associates plan R$ 63 billion in investments to develop the new industry in Brazil.
According to the association, the projects involve green hydrogen, green ammonia, e-fuels, e-methanol, and green fertilizers. The portfolio is linked to enterprises distributed across states such as Ceará, Pernambuco, Minas Gerais, Rio Grande do Norte, Bahia, and Rio de Janeiro.
The highest concentration of initiatives is in the Northeast, a strategic region due to its strong solar and wind generation, as well as ports that can serve both the domestic market and future exports.
But the potential has not yet turned into a wave of construction. Without a decree, companies continue to wait for a final rule to decide if they will advance, when they will advance, and under what financial conditions.
Northeast leads the bet but depends on contracts and infrastructure
The Northeast appears as the natural center of Brazil’s race for green hydrogen. The region combines sun, wind, industrial areas, and ports, factors that help produce low-emission fuel with renewable energy.
Even so, advancement depends on more than natural resources. Companies need buyers, advance contracts, financing lines, electrical infrastructure, and clear tax rules.
The Folha de S.Paulo reported that European buyers are an important part of this equation, as Europe is one of the main bets to absorb low-emission hydrogen and its derivatives.
Fernanda Delgado, CEO of ABIHV, told Folha that one of the sector’s agendas is to work on the European side to secure early contracts with projects in Brazil. According to her, however, internal conditions also need to be ready, including decrees, financing, and infrastructure.
Decree became a decisive piece to get projects off the ground
In 2026, the central news point is precisely this: Brazil already has laws, announced projects, and planned tax incentives, but still needs the decree to turn the legal framework into a practical mechanism.
The delay creates insecurity for companies competing for international capital. In a global industry still in formation, countries compete to attract factories, port hubs, green ammonia producers, electrolyzer developers, and industrial buyers.
If the rule delays, investment may migrate to markets with a more predictable schedule. This risk concerns the sector because the decision window is global, not just Brazilian.
Therefore, regulation is not a bureaucratic detail. It can define who will have access to incentives, what the auction design will be, which projects will take the lead, and what type of low-emission hydrogen Brazil intends to stimulate.
Brazil has potential, but the regulatory clock is ticking
Green hydrogen is seen as one of the big bets of the energy transition for hard-to-decarbonize sectors such as steel, fertilizers, chemicals, heavy transport, and maritime fuels.
Brazil has important advantages: a clean electricity matrix, renewable expansion, strategic ports, energy experience, and interest from global companies. But this set still needs predictability to turn into effective investment.
The 18-month wait cited by Folha shows that the sector reached 2026 pressing for a decision. The government, in turn, began to indicate in June 2026 that the decree was near.
While the final rule is not yet in place, the R$ 24.6 billion in tax incentives remain at the center of the dispute. The country has billion-dollar projects on the radar but still needs to turn approved law into applicable rule so that green hydrogen advances from promise to construction, contract, and production.
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