Senate approves amendment preserving tax incentives for low-carbon hydrogen after Tax Reform

On September 30, the Federal Senate approved Complementary Bill (PLP 108/2024), which regulates the second phase of the consumption tax reform. Among its most important points, the proposal received an amendment that guarantees the maintenance of tax incentives for low-carbon hydrogen, ensuring the continuity of the Special Incentive Regime for the Production of Low-Carbon Hydrogen (Rehidro). This measure is considered crucial to maintaining the legal certainty of strategic projects in the energy sector and strengthening Brazil's leading role in the transition to a low-carbon economy.

Amendment to PLP 108/2024 avoids regulatory uncertainty and ensures the advancement of billion-dollar investments.

Adjusting Rehidro to the new tax structure provided for in Complementary Law No. 214/2025 eliminates the risk that the benefits would expire after 2027, which could compromise initiatives in the planning phase, especially in the Northeast, the region with the largest concentration of green hydrogen projects. The amendment, proposed by Senators Augusta Brito (Workers' Party-CE) and Cid Gomes (PSB-CE) and accepted by rapporteur Eduardo Braga (MDB-AM), corrects a gap that concerned investors and ensures that businesses maintain access to tax incentives essential for their viability.

The text now goes to the Chamber of Deputies for consideration, where the expectation is that the amendment will be maintained, consolidating Rehidro as an integral part of the new tax regime. If confirmed, Brazil will strengthen its position among the countries best prepared to attract billions in clean energy investments, leveraging its predominantly renewable electricity matrix and its potential in sources such as wind and solar. The Senate's decision is seen as a strategic step to ensure regulatory predictability, boost investor confidence, and accelerate the country's transformation into an emerging hub in the global hydrogen economy.