On September 30, 2025, the Federal Senate approved Complementary Bill No. 108/2024, which regulates the second phase of Brazil’s tax reform on consumption and guarantees the continuation of tax benefits for the production of low-carbon hydrogen. The proposal, reported by Senator Eduardo Braga (MDB/AM), incorporated an amendment introduced by Senators Augusta Brito (PT) and Cid Gomes (PSB), both from Ceará — the state that concentrates most of the country’s green hydrogen feasibility studies.
The amendment addresses a gap in Complementary Law No. 214/2025, which established the new tax regime, ensuring that the incentives granted under the Special Regime for Incentives to Low-Carbon Hydrogen Production (Rehidro) remain valid even after the transition to the new fiscal system. Without this technical adjustment, the benefits would lose their effectiveness starting in 2027, potentially undermining investments and halting projects still in the planning stage.
Rehidro, created by the Hydrogen Legal Framework (Law No. 14,948/2024), is regarded as a key policy to attract capital, strengthen the value chain, and expand the use of low-carbon hydrogen in Brazil. Before the amendment, the absence of explicit reference to Rehidro in the new law had generated regulatory uncertainty among investors and companies in the sector, as it left doubts about the continuity of tax exemptions previously granted under the Special Regime for Incentives to Infrastructure Development (Reidi).
The lack of clarity had already been identified by the Ministry of Finance, which had sent a draft text to the Office of the Attorney General of the National Treasury (PGFN) seeking to ensure the constitutionality of maintaining the incentives and to prevent the issue from reopening in Congress.
With the approval of the amendment, the Senate reinforces legal certainty for low-carbon hydrogen projects, ensuring stability for continued investment in infrastructure and energy innovation. The bill now proceeds to the Chamber of Deputies, where it will be reviewed by the relevant committees before a final vote.
Photo: Canva
