ABIHV (Brazilian Association of the Green Hydrogen Industry) has expressed opposition to the "energy additionality" criterion foreseen in Conversion Bill No. 10/2025, originating from Provisional Measure No. 1.304, which promotes a broad reform in the electricity sector.
The provision, inserted in article 16-B, paragraph 8, of Law 9.074/1995, as amended by article 2 of Bill 10/2025, stipulates that all new self-production arrangements must necessarily involve the contracting of energy from new generation projects.
In practice, projects such as data centers and hydrogen production units are prevented from establishing self-production partnerships with existing plants.
Self-generation is a model in which the consumer invests in building their own power plant or partners with a generator, obtaining reduced charges, lower energy costs, and predictability in supply. However, Provisional Measure No. 1.304 tightened the criteria for this modality – one of the government's measures to curb the increase in subsidies embedded in energy tariffs.
The additionality rule seeks to stimulate the construction of new renewable energy plants. ABIHV, however, considers that the requirement is detrimental to the sector, especially given the current scenario of excess generation, cited as one of the causes of the curtailment crisis (generation cuts).
"Forcing self-producers to install new generation will prevent the flow of this existing energy, maintaining the situation and the imbalance between electricity supply and demand, which will perpetuate curtailment," states ABIHV in a letter sent to the Minister of Mines and Energy, Alexandre Silveira, and to the press.
The organization emphasizes that the requirement for new power plants makes it impossible to use energy from operating hydroelectric plants for sectors such as green hydrogen and data centers. "The existing energy has already been amortized, and therefore accessing it reduces risks and helps to make green hydrogen projects viable."
According to ABIHV, the additionality criterion was included in the text in the final stages of the processing of Provisional Measure 1304 in the Joint Committee, through an oral suggestion presented during the voting. "Therefore, there was not the slightest possibility of any technical discussion about a provision with such a significant impact on the Brazilian electrical system."
"We don't need to add new renewable energy, as we already have it in abundance and at competitive prices," the association emphasizes.
MP 1304 also postpones the start of the Low Carbon Hydrogen Program (PHBC), created by Laws 14.948 and 14.990, both from 2024. The program provided for the granting of tax credits of R$ 18,3 billion to producers and buyers of low-emission hydrogen between 2028 and 2032. With the new wording, the deadline is extended to the period from 2030 to 2034.
According to the government, the postponement aims to align the development schedule of hydrogen projects with the expansion of the transmission system, considered one of the main bottlenecks for the installation of new energy-intensive loads.
“The postponement to 2030 is highly relevant considering the well-known challenges in electricity transmission infrastructure. Without a renegotiation between the PHBC deadlines and the estimated delivery dates for the network reinforcement works, there would be a real risk of poor PHBC performance due to the sheer lack of operational projects that could access it,” highlights ABIHV.
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