Chamber of Deputies in Brazil Approves Green Hydrogen Project with $ 3 billion in Incentives
Representatives maintained an increase in the fuel's pollution potential, a change made in the Senate
The Chamber of Deputies approved this Thursday (11) the bill for low-carbon hydrogen, the so-called green hydrogen, and maintained the changes made by the Senate. The approved text provides for up to R$ 18 billion in tax incentives, increases the fuel's pollution potential, and includes hydroelectric plants and agribusiness.
Now the proposal, reported by Deputy Arnaldo Jardim (Cidadania-SP), goes to President Luiz Inácio Lula da Silva (PT) for sanction. On the first passage of the project through the Chamber, the text was approved at the end of 2023, but without the provision for incentives.
An agreement was reached for this issue to be addressed in the Senate. The senators then added within the creation of Rehidro (Special Incentive Regime for the Production of Low Carbon Emission Hydrogen) a provision for up to R$ 18 billion ($ 3 billion) in benefits, which was maintained in this second vote by the deputies.
Rehidro grants tax credits within the Social Contribution on Net Profit (CSLL). The credit can be converted into financial reimbursement if there are not enough tax debts to offset the amount. The established limit is R$ 1.7 billion ( $ 311 million) in 2028, R$ 2.9 billion ($ 531 million) in 2029, R$ 4.2 billion in 2030, R$ 4.5 billion in 2031, and R$ 5 billion ($ 915 million) in 2032. As shown by Folha, the Senate almost doubled the fuel's pollution potential in a last-minute change to the text, made in just two minutes and without discussion. Defenders of the change say it aims to enable hydrogen production through biofuels — which was also only made possible after a change made by the senators, including ethanol and hydroelectric plants.