MME submits proposal for National Hydrogen Program guidelines
Program marks a milestone in Brazilian gas use regulation and defines actions to promote the hydrogen economy
On August 4, 2021, Brazil’s Ministry of Mines and Energy (MME) submitted its proposed guidelines for the National Hydrogen Program (PNH2) to the National Energy Policy Council (CNPE). The guidelines are based on studies developed together with the Ministry of Science, Technology and Innovation (MCTI), the Ministry of Regional Development (MDR) and the Energy Research Company (EPE) – in compliance with CNPE Resolution No. 6/2021, which determined the creation of the PNH2.
The PNH2 marks an important step in the development of future hydrogen regulation in Brazil. The program aims to promote hydrogen as a viable, competitive energy option, facilitating its entry into the Brazilian energy matrix and contributing to sustainable development. The program also seeks to define a set of actions that address public policies, technology and the market in relation to the hydrogen economy.
The main points and actions in the proposed guidelines are outlined below.
The PNH2 sets out seven general principles for developing the hydrogen market in Brazil, including:
- Promote the potential of national energy resources. Brazil can obtain hydrogen through several renewable and non-renewable sources (i.e. hydrogen produced from natural gas or hydrogen produced from renewable electricity generation), and hydrogen can be used in a variety of economic sectors, such as transport, energy, steel and mining.
- Be comprehensive. In addition to various energy sources and technological production alternatives, potential hydrogen production synergies, logistics, storage and uses should be considered.
- Align efforts with ambitions to decarbonize the economy. Consider plans that make it possible for hydrogen to contribute to net carbon neutrality by 2050.
- Seek out synergies and coordinate with other countries. As the hydrogen market is globally relevant, its development can be boosted through international cooperation and coordination.
In order to comply with these general principles, the PNH2 is structured in favor of:
- Strengthening science and technology – to be carried out by mapping out and investing in relevant initiatives, supporting technological research and development, constructing pilot plants for hydrogen production and storage, constructing laboratories, coordinating government, academia and industry efforts, identifying possible shortcomings, supporting and promoting RD&I.
- Human Resources Training – the development of a domestic workforce capable of planning, licensing, implementing and operating projects for producing, transporting, using and storing hydrogen. This involves promoting technical and professional training on hydrogen; providing incentives to develop patents, books, technical and scientific publications; training within the public sector (to design public policies regarding hydrogen and related technologies); and stimulating the creation of research groups in different areas.
- Energy planning – conducting studies of existing and potential supply and demand, as well as improving modeling and hydrogen’s inclusion within national energy planning processes. This may be done by improving databases and information – including primary research; planning studies for the energy sector that take aspects of supply and demand into account; mapping national geological structures for CCUS (Carbon Capture Use and Storage) and mapping natural or geological hydrogen reserves, as well as evaluating the feasibility of their exploitation.
- A legal and normative regulatory framework – the plan provides for studying existing domestic laws and regulations for subsidizing the inclusion of hydrogen, and to promote regulation specifically regarding the transport, quality, storage and use of hydrogen and its technologies through regulatory agencies. Initially, it seeks to outline regulatory agencies, competent bodies and entities’ existing competences; set standards in accordance with international rules; promote cooperation between government agencies in regard to hydrogen regulation, considering its multiple sources and uses; assess the need to propose additional safety standards for producing, transporting and using hydrogen; and verify the need for certifying hydrogen production and consumption.
- Opening the market and increasing competition – confirming the main domestic players that already operate with hydrogen in electricity and transport services, to mobilize the use of hydrogen technologies in other production chains. Related actions include assessing the tax aspects and value of hydrogen, assessing project financing needs and conditions, identifying the opportunities for demand and dissemination, as well as analyzing Brazil’s situation in international value chains and impacts on carbon pricing.
- International cooperation – the intention is to harness increasing international cooperation as an integral part of the technological cycle, industrial development and consolidation of the hydrogen economy in Brazil. Thus, it seeks to deepen international dialogue and further cooperation, encourage industrial partnerships in the hydrogen production chain, identify potential international financing sources and instruments, among other measures.
The proposed guidelines also address governance practices linked to the HNP2. A HNP2 Technical Committee will periodically approve the work plan and may also submit it for public consultation.
Click here to see the full proposal for the National Hydrogen Program Guidelines (available in Portuguese only).
For further information on the National Hydrogen Program, please contact Mattos Filho’s Infrastructure and Energy practice.