Law No. 14.948/2024 has arrived to definitively change the game in the Brazilian energy sector. For the first time, we have a solid regulatory framework for low-carbon hydrogen—a move that places Brazil at the center of the global energy transition. But this goes far beyond a simple legal change: we're talking about a new universe of possibilities and challenges for companies of all sizes operating in the country.
How the new regulatory framework works
The new legislation brought clarity where there had previously been uncertainty. Enacted on August 2, 2024, Law 14,948 created three distinct categories: low-carbon hydrogen (which cannot generate more than 7 kg of CO₂ per kg of H₂ by 2030), renewable hydrogen (made exclusively from renewable sources), and green hydrogen (produced through the electrolysis of water using 100% clean energy).
These definitions aren't just technical details—they make all the difference in practice. Depending on which category your company falls into, access to incentives and certifications changes completely. The Brazilian Hydrogen Certification System (SBCH2) was created as a voluntary certification, serving as a seal of quality that can open doors in the international market.
For those in charge of companies, understanding these nuances has become a strategic issue. If you plan to invest in the sector, you need to align your operations with these technical specifications to fully leverage the benefits the law offers. Certification may not be mandatory, but it has become a key competitive differentiator, especially for those targeting exports or global partnerships.
How investments will change
Here's the part that interests the corporate world most: the upcoming tax incentives. Starting January 1, 2025, the government will suspend the collection of PIS/Pasep and Cofins taxes for five years on the purchase or import of machinery, instruments, and materials for green hydrogen projects.
For companies, this means a radical shift in investment calculations. Sectors such as renewable energy, petrochemicals, steel, and agribusiness could see their initial costs—traditionally the biggest obstacle to market entry—fall significantly. The Special Incentive Regime for Low-Carbon Hydrogen Production (Rehidro) goes beyond equipment: it also covers raw materials, intermediate products, and inventory.
But there's more: Law No. 14,990/2024 released R$18.3 billion in tax incentives specifically for the production and purchase of green hydrogen. These credits will be distributed between 2028 and 2032, with increasing amounts over time. It's a clear sign that the government is investing heavily and sustainably in the sector.
Smart companies will see these incentives as a unique window of opportunity to position themselves in the market. The timeline suggests that those who invest early will accumulate considerable advantages over time.
New markets opening up
The impact goes far beyond the traditional energy sector. In agribusiness, for example, the production of green ammonia for fertilizers could quietly revolutionize the entire supply chain. Companies in the sector have the opportunity to drastically reduce their dependence on imported inputs while meeting the growing sustainability demands of international customers.
The chemical and petrochemical industries also see green hydrogen as a real path to decarbonization. Processes that have traditionally relied on fossil fuels can be redesigned, allowing companies to be more sustainable without losing cost competitiveness. The new legislation removes regulatory barriers and offers clear economic incentives for this transition.
In the mining and steel sector, the legal framework responds to growing pressure for decarbonization. Green steel production, using hydrogen instead of coking coal as a reducing agent, is no longer merely a technical possibility but has become economically attractive. For companies exporting to Europe or North America—where carbon taxes are being implemented—this shift becomes a matter of market survival.
The challenges that will arise
Of course, not everything is rosy. The legal framework brings with it complex operational challenges. Our electrical transmission infrastructure will require significant adaptations to meet the energy demands of industrial electrolyzers. Companies planning large-scale operations should consider additional infrastructure investments or seek strategic partnerships with transmission companies.
The lack of skilled labor is another critical bottleneck. The Brazilian market still lacks sufficient professionals skilled in hydrogen technologies, from process engineers to maintenance technicians. The smartest companies are already taking the leap, creating partnerships with universities and internal training programs.
Transportation and storage costs continue to be a technological and logistical challenge. For companies with geographically dispersed operations, finding innovative logistics solutions can be the key to making a difference. Integrating maritime and road transportation requires careful strategic planning.
Brazil in the world competition
The Brazilian legal framework comes at a time when there is a fierce global race for leadership in the green hydrogen market. Countries like Australia, Chile, and Saudi Arabia have already launched aggressive programs to develop the sector. For Brazilian companies, our legislation offers the necessary tools to compete on equal terms in this scenario.
Brazil's greatest advantage lies in our exceptionally renewable energy matrix and potentially low production costs. Studies show that Brazilian green hydrogen could reach less than US$1.69/kg by 2030, placing the country among the most competitive producers in the world. For companies, this opens up opportunities both domestically and for exports.
National certification through SBCH2 can serve as a globally recognized seal of quality, facilitating trade agreements and technological partnerships. Companies that achieve certification early can gain lasting competitive advantages.
Every size of company has its chance
The legal framework was designed to cover companies of all sizes, albeit with important specificities. Large corporations can immediately take advantage of tax incentives for large-scale industrial projects, while medium-sized companies can focus on specific applications or strategic partnerships.
For startups and technology companies, the legislation opens up a world of opportunities in the development of complementary solutions: management software, specialized equipment, consulting services, and certification. The Brazilian innovation ecosystem has everything it needs to benefit enormously from this new technological demand.
Small businesses, particularly in the engineering and industrial services sectors, can find their niche in the maintenance, installation, and operation of green hydrogen equipment. The legislation indirectly creates an entire supply chain that will be in high demand in the coming years.
What's next
With tax incentives taking effect on January 1, 2025, the timeline for business planning is well defined. Interested companies need to begin the technical and economic assessment processes now to fully capitalize on this window of opportunity.
The period from 2025 to 2030 will be decisive for those looking to establish a position in the market. Brazil will have greater legal certainty for investments in hydrogen projects, contributing to the decarbonization of our energy matrix.This environment of legal certainty is crucial when it comes to long-term investment decisions.
The supplementary regulations, which will be developed in the coming months, will define more specific operational aspects. Companies need to keep an eye on these regulations to ensure full compliance and maximize the benefits available.
Final reflections
The green hydrogen legal framework is much more than a sectoral opportunity – it represents a complete redefinition of Brazil's energy possibilities. For companies, the question is no longer whether to participate in this transformation, but rather how to strategically position themselves to extract maximum value.
The convergence of sustainability, economic competitiveness, and regulatory incentives has created a unique business environment. Companies that can effectively navigate the technical and regulatory complexities will emerge as leaders in the next decade.
Success in this new energy paradigm will require strategic vision, execution capacity, and flexibility to adapt. The legal framework provides the necessary tools; it is up to companies to use them intelligently and decisively to build Brazil's energy future.
