Law No. 14,948/2024, published on August 2, 2024, establishes the national legal framework concerning low-emission hydrogen and assigns significant regulatory responsibilities to ANP , including:

1. Authorization for the production of low-carbon hydrogen, respecting the attributions of the other agencies (Art. 11, § 1);
2. Transfer of ownership of the production authorization (Art. 11, § 3);
3. Exemption from production authorization in case of use of hydrogen as an input or by volume produced through activity registration (Art. 11, §4 - to be defined in regulation);
4. Use of experimental regulatory environment sandbox, pilot regulation or by pilot project as temporary regulatory solutions until specific regulation is issued (Art. 12);
5. Regulate, authorize and supervise the exercise of the activity of exploration and production of natural or geological hydrogen in the national territory (Art. 13 - Grant modalities to be defined in regulation);
6. Authorization of loading, processing, treatment, import, export, storage, storage, packaging, transportation, transfer, resale and commercialization of hydrogen, its derivatives and carriers (Art. 14 - Priority to those who already have authorization for production). 

In addition, ANP is Management Committee of the National Hydrogen Program (Coges-PNH2) member. Low-emission hydrogen can play a key role in reducing greenhouse gas (GHG) emissions, supporting the sustainability of the energy sector, and helping to achieve the goals set out in international agreements

According to Law No. 14.948/2024, low-carbon hydrogen is the fuel or industrial input produced from various sources or processes that results in greenhouse gas (GHG) emissions, as determined by life cycle analysis, with an initial value of less than or equal to 7 kgCO2eq/kgH2 (seven kilograms of CO2 equivalent per kg of H2 produced). This threshold will serve as reference until December 31, 2030, after which it  may be reviewed.

The law also defines the concept of renewable hydrogen aslow-carbon hydrogen that is produced from geological sources (natural hydrogen) or obtained from biomass, ethanol, and other biofuels. It also includes electrolytic hydrogen produced through water electrolysis using renewable energy sources such as solar, wind, hydro, biomass, ethanol, biogas, biomethane, landfill gases, geothermal energy, and others to be defined by public authorities. Fossil sources, such as natural gas, cannot be used in the production of renewable hydrogen, even if carbon capture and storage are employed. Also, the legal framework defines green hydrogen as the hydrogen produced exclusively through water electrolysis, using renewable energy sources.

Hydrogen produced from the electrolysis of water using renewable energy is historically known as "green" hydrogen. However, in order to avoid discrimination against production routes that can be as clean as electrolysis, it has been conventionally decided in recent years to label hydrogen derived from water electrolysis and other routes that can demonstrate, through life cycle analysis, their low carbon footprint as low-carbon hydrogen.

As outlined in Article 12 of Law No. 14,948/2024, the regulatory sandbox has been chosen as one of the tools that can be used to develop regulations for the activities described, until specific resolutions or instruments are issued. The sole paragraph of the same article states that the regulatory body may adopt individual solutions to comply with the provisions of the law, following its decision-making process, until specific regulation is established.  

In 2024, the Working Group created in 2022 by the ANP to discuss the topic, produced the Implementation Report of the Regulatory Framework for Low-Carbon Hydrogen in Brazil (in Portuguese). In addition to an overview of the subject, the report sought to bring some relevant technical elements on the subject for a non-exhaustive introduction. Some cases of policies and actions adopted on the subject in selected countries that may give clues about future regulatory decisions were also presented. Finally, the main impacts resulting from Law No. 14,948/2024 on the Agency's structure and processes were studied.

Nearly two decades after the creation of the ANP, the Paris Agreement, signed in 2015, marked a milestone in efforts for mitigating climate change and reinforcing sustainable development as a goal among the world’s major economies. One of its key goals is to promote significant reductions in GHG, through the decarbonization of energy systems, increased participation of renewable sources, and the expansion of electrification in energy supply. Together these efforts could contribute to a reduction of about 75% in emissions.

The use of biofuels, hydrogen (and its derivatives) and technologies such as CCUS (Carbon Capture, Use and Storage) and BECCS (Bioenergy with Carbon Capture and Storage) emerge as promises of allies in the decarbonization processes and contribution to emission reduction goals.

ANP plays a key hoje in eimplementing the National Biofuels Policy - Law No. 13,576/2017, which includes a program called RenovaBio. This program was established to reduce carbon intensity in fuels, through the decarbonization credits , known as CBios. Biofuel producers are required to issue these credits, which must be compulsorily acquired by fuel distributors. Since its implementation, the program has prevented the release of over 100 million tons of CO2 equivalents into the atmosphere.

Renewable sources, including biofuels, will continue to play a significant role in global decarbonization until 2050, accounting for up to 25% of global emission reductions. (International Renewable Energy Agency - IRENA, 2023).

Besides that, with the growing share of solar and wind energy in the global electricity matrix, there is an increasing demand for energy storage systems to support the use of surplus renewable energies. Batteries, often cited as mechanisms capable of promoting this storage, are still quite costly for this purpose and technologically need further evolution to fulfill this mission. Thus, the transformation of excess renewable electric energy into some kind of storable energy substance would be a quite promising solution.

This transformation exists and is characterized by a simple reaction that breaks down water molecules into hydrogen and oxygen – known as electrolysis or hydrolysis of water, with hydrogen being a fuel byproduct known for centuries.

The use of hydrogen gas is relatively mature, with significant applications in numerous industries such as: oil refining, ammonia production, methanol, metallurgy, food industry, among others. In Brazil, particularly, the petrochemical sector is the largest producer and consumer of this gas, mainly using it to reduce sulfur content in fossil fuels in hydroprocessing units. The production and industrial use of hydrogen in Brazil are well-established. 

Therefore, hydrogen is already a common product in Brazil’s petrochemical sector. The ley innovation for the emerging hydrogen industry is that the new hydrogen must be produced using renewable energy sources and have a low carbon footprint  throughout its life cycle.

Brazil already has numerous projects for low-carbon hydrogen production, and experts believe that, with one of the cleanest energy matrices in the world, the country has high potential for producing this type of hydrogen.

According to the contracts for exploration and prodution of O&G, large production fields must allocate a percentage between 1% and 0.5% of their gross revenue to research, development and innovation (RD&I) projects. Last year this figure was just over R$ 3 billion, which means around US$ 500 million, as published in the PD&I dashboard of ANP.

In 2021, the national energy policy council (CNPE) determined that the ANP and ANEEL (which also regulates obligations for investment in RD&I) should prioritize the allocation of RD&I resources to specific topics, including hydrogen (CNPE Res. No. 02/2021).

Since 2021, Hydrogen RD&I projects have been started, corresponding to investments of around R$ 430 million, which is equivalent to around US$ 71 million.

Examples of these projects include the project to produce green hydrogen from ethanol, carried out by USP, Hytron, Toyota and Shell (R$ 42 million/US$ 7 million); the project to assess the geological potential for the exploration of natural hydrogen, carried out by Petrobras (R$ 12 million/US$ 2 million); the project to produce hydrogen from offshore wind energy carried out by Total and UFRJ (R$ 3.4 million/US$ 560 thousand). 

 See the following link for the main projects in the country so far:
- Resource potential for the production of low-carbon hydrogen (the panel is published on the Hydrogen in Brazil page, on the EPE website, in Portuguese).
See also:
- National Hydrogen Program - PNH2 - Ministry of Mines and Energy (in Portuguese)