Brazil already has a target date for the The main support mechanism for the low-emission hydrogen industry. The Ministry of Finance announced that the first auction of the Low Carbon Hydrogen Development Program (PHBC) will take place in January 2027, a milestone eagerly awaited by the market since the enactment of Law 14.948.
The timeline's definition comes at a crucial moment for the sector. At least seven industrial projects, representing investments of USD 63 billion, are expected to reach their final investment decision (FID) during 2026, but the pending regulations of the legal framework remain one of the main sources of uncertainty.
The timeline presented by Carlos Colombo , Secretary of Economic Reforms at the Ministry of Finance, outlines the development of the auction model, its institutional review, operational testing, calibration, and definition of technical criteria throughout 2026. A public consultation is then scheduled for November and December of that year.
The industry is awaiting the publication of the implementing decree for Law 14.948/2024, approved last August. While the law established incentives for research, infrastructure, and exports, the operational mechanisms for allocating the intended benefits still need to be defined.
The preliminary design presented by the Government aims for a competitive mechanism to distribute R$ 18.3 billion in tax credits between 2030 and 2034. The resources will be allocated to projects related to fertilizers, cement, heavy transport, chemical and petrochemical industries.
Among the anticipated criteria are climate performance indicators, emissions intensity, and cost per ton of carbon avoided. Strict systems for monitoring, reporting, and verifying results are also planned.
Another key element is the World Bank's involvement in the program's technical structuring. The organization is working alongside the Ministry of Finance and other areas of the Federal Government to develop the mechanism that will serve as the basis for future competitive rounds.
For the Brazilian Association of the Green Hydrogen Industry (ABIHV), the announcement represents a relevant signal for the market.
“ Incredible news for a sector that needs good news! ” said Fernanda Delgado , CEO of ABIHV, on social media after the announcement by the Secretary of Economic Reforms.
According to the association, setting dates provides predictability for developers and allows them to begin structuring participation strategies before the final rules are published.
The challenge now is to turn the legal framework into projects
The confirmation of the first auction comes after the approval of the Green Hydrogen Legal Framework, considered one of the most important regulatory advances in the region for this industry.
However, the development of the Brazilian market still faces structural challenges. Although approximately 66% of the projects identified in the country are already in the pilot or commercial scale stage , difficulties persist related to production costs, a lack of specialized logistics infrastructure, and a shortage of skilled labor.
Brazil is seeking to leverage a competitive advantage that is difficult to replicate. Between 45% and 50% of its energy mix is renewable , compared to a global average of around 15%. Furthermore, over 80% of its electricity generation comes from renewable sources , a condition that significantly improves the competitiveness of future low-emission hydrogen projects.
In this context, the PHBC appears as the missing piece to transform regulatory potential into concrete investments. The market's focus will now be on the regulations implementing Law 14.948, the public consultation scheduled for the end of 2026, and the definition of the criteria that will determine who will have access to the program's tax incentives.