The growing interest in hydrogen as a sustainable energy source has led several countries to establish regulations and standards for its production and use. In Brazil, the new Legal Framework for Low Carbon Hydrogen – Law No. 14.948/2024 – establishes the Brazilian Hydrogen Certification System (SBCH2). Below, we present a detailed analysis of the provisions brought by this new legal framework, covering the system’s structure and governance as well as the specific criteria for certifying hydrogen produced in the country.
The main objective of the Brazilian Hydrogen Certification System (SBCH2) is to promote the sustainable use of hydrogen, ensuring that its production and use adhere to environmental standards and greenhouse gas (GHG) emission limits. The certificate will provide essential information about the emissions intensity associated with the hydrogen production chain.
This certification system will be voluntary for hydrogen producers or their derivatives. However, once producers choose to participate in the SBCH2, the governance rules set by the system will become mandatory. This aspect highlights the importance of the parties’ freedom to negotiate, allowing producers to decide whether to join the system, but imposing specific obligations once the choice is made.
As a way to encourage participation in the certification system, the legal framework explicitly provides the possibility for hydrogen producers to publicize their involvement. In other words, companies producing hydrogen will be able to market their participation in the system, showing potential buyers that their product complies with the GHG emission limits.
Additionally, the new legal framework allows for the recognition of hydrogen certification produced outside Brazil, in case imported hydrogen is needed, with specific details to be regulated.
Regarding the organizational structure of SBCH2, it will be composed of seven main entities or agents:
- Competent Authority: Responsible for formulating public policies related to hydrogen certification in Brazil (Article 17).
- Regulatory Authority: Responsible for overseeing the SBCH2, with duties that include defining regulations, certification standards, monitoring, and enforcing sanctions (Article 18).
- Certifying Entity: A private institution accredited by the accrediting body to issue hydrogen certificates, responsible for conducting the product compliance assessment (Article 20).
- Accrediting Institution: Responsible for accrediting certifying entities and auditing the certificates issued (Article 19).
- Registry Manager: Manages the hydrogen certificate database, ensuring the authenticity and accessibility of the information (Article 21).
- Producer: An economic agent that produces hydrogen or its derivatives.
- Buyer: An economic agent that acquires certified hydrogen.
The Regulatory Authority will play a central role in the operation of the SBCH2. It will be responsible for implementing the guidelines established by the Competent Authority and ensuring that the entire certification process is conducted according to the stipulated standards and minimum requirements (Article 18, I and II). Additionally, the Regulatory Authority has the power to supervise both hydrogen producers and certifying entities, ensuring compliance with the standards (Article 18, IV and V).
The Accrediting Institution will have the critical function of accrediting certifying entities, which will be responsible for assessing the compliance of the hydrogen produced. Accreditation will be carried out through a specific procedure, to be established by the Regulatory Authority (Article 19, I). This process will ensure that certifying entities operate with the integrity and competence necessary to maintain the reliability of the certification system.
The Registry Manager will be essential for the effective transparency and accessibility of the SBCH2, maintaining an up-to-date and public database of the certificates issued. This database will allow hydrogen buyers to verify the authenticity of the certificates, ensuring the integrity of the system (Article 21, §3).
The certification system must also ensure the environmental integrity of the issued certificates, avoiding double counting of emissions, which could undermine the credibility and effectiveness of climate mitigation policies (Article 22, sole paragraph). Life cycle analysis is a robust tool that considers all stages of production, from raw material extraction to final product delivery, ensuring that all emissions are accounted for accurately.
Additionally, certifying entities may issue compliance seals for hydrogen produced in the national territory, according to criteria to be established in regulation (Article 23). These seals provide a way to categorize hydrogen based on its emissions profile, offering consumers and regulators an additional tool to assess the sustainability of the product.
The certification of hydrogen will be guided by the Brazilian Hydrogen Certification Plan (PBCH2), which will establish the detailed guidelines for the certification process (Article 24). This plan will include, among other aspects, the custody chain model, the boundaries of the certification system, and criteria for suspending or canceling issued certificates. Interoperability and harmonization with international standards are also addressed, ensuring that hydrogen certified in Brazil is recognized in global markets (Article 25).
In summary, the Brazilian Hydrogen Certification System (SBCH2) represents a significant advancement for Brazil in promoting hydrogen as a sustainable energy source. With a robust structure that includes multiple governance bodies and a specific certification process, the SBCH2 is expected to ensure that hydrogen produced in Brazil meets sustainability and environmental compliance standards.
