The Ministry of Finance is working on structuring the first auction for the PHBC, aiming to foster the production of low-carbon hydrogen through performance and sustainability criteria.
The federal government has intensified efforts to implement the Low-Carbon Hydrogen Development Program (PHBC).
The economic team is currently in the process of defining the competitive model and institutional structure, with technical support from international entities such as the World Bank, UNIDO, the H2Global Foundation, and the consultancy PSR Energy.
The timeline also includes a series of strategic dialogues with the private sector.
The core focus of the government’s strategy is to link public incentives to concrete results.
Instead of merely financing the installation of production facilities, the program’s design requires proof of actual delivery of the commodity, coupled with rigorous sustainability goals.
“Projects must prove low carbon intensity, meet sustainability and innovation commitments, and under the PHBC, compete for public funding while effectively producing or consuming the hydrogen,” the ministry emphasized in an official statement.
Rules and benefits of the regulatory framework
Established by Decree 13.096/2026, the PHBC allocates R$ 18.3 billion in tax credits for the 2030–2034 period.
Priority in project selection is given to hard-to-abate sectors, including fertilizer production, steel, cement, the chemical and petrochemical industries, and heavy-duty transport.
The legal framework also includes Rehidro, which offers tax benefits such as a zero rate for PIS/Pasep and Cofins.
To take advantage of these benefits, companies must meet local content requirements and make mandatory investments: 1% of the investment must be directed to energy transition projects, and another 1% must go toward R&D&I (Research, Development, and Innovation).
Local content and certification
The requirement for domestically manufactured components varies according to the technology and the operational stage.
Electrolysis systems must contain at least 15% local content, while other production routes require 40%.
For transport and distribution equipment, the target is even more ambitious, reaching 60%.
To be classified as low-carbon hydrogen, the product must be approved by the SBCH2 (Brazilian Hydrogen Certification System).
The standard establishes that lifecycle emission intensity cannot exceed the limit of 7 kg of CO₂ equivalent per kilogram of hydrogen produced.
With these guidelines, Brazil seeks to attract robust investment and strengthen its position in the new global green economy.
