[SMM Analysis] COP30 to Launch New Hydrogen Policy: Brazil Finalizes Low-Carbon Hydrogen Legal Framework and Tax Incentives

Summary of the Previous Section:

Recently, Brazil's Minister of Mines and Energy, Alexandre Silveira, announced that a decree for a tax credit mechanism for the low-carbon hydrogen industry will be officially signed during the 30th United Nations Climate Change Conference (COP30).

Silveira emphasized, "Brazil is steadily advancing with legal certainty, innovative spirit, and strategic vision. Low-carbon hydrogen will become one of the key drivers of our energy transition and sustainable reindustrialization." As an important participant in the global energy transition, Brazil's implementation of this policy coincides with COP30, demonstrating its proactive stance in climate governance and setting a policy benchmark for hydrogen energy development in Latin America.

I. Impact on the Global Green Hydrogen Industry

1. Policy Certainty Activates Investment Potential

The core value of the tax credit mechanism introduced by Brazil lies in using tax credits as a widely accepted industrial incentive tool to directly reduce investment costs and operational pressures for green hydrogen producers. Additionally, combined with Brazil's abundant wind and solar renewable energy resources, it is expected to attract global capital to focus on the Latin American green hydrogen market.

2. Acceleration of the Latin American Hydrogen Supply System

As a major economic and energy power in Latin America, Brazil's policy demonstration effect will drive coordinated development of the hydrogen industry in neighboring countries such as Argentina and Chile. These countries possess high-quality renewable energy endowments and have already incorporated hydrogen into their national energy strategies. The industrial ecosystem constructed by Brazil through plans like PNH2 can form synergies with other countries in the region, further concentrating global green hydrogen capacity in resource-intensive areas.

3. Optimization of the Competitive Landscape in the Low-Carbon Hydrogen Sector

Brazil's policy explicitly covers all categories of "low-carbon hydrogen" (including green and blue hydrogen). SMM speculates that the tax credit mechanism is likely to favor green hydrogen, compelling blue hydrogen projects to upgrade carbon capture technologies to reduce emission intensity. Furthermore, the establishment of industry standards under the policy framework will also promote the improvement of the global green hydrogen trading system.

II. Multidimensional Impact on the Chinese Market

1. Prominent Opportunities for Equipment Exports and Technological Cooperation

China has significant advantages in the entire green hydrogen industry chain, particularly in the capacity and technological level of core equipment such as electrolyzers and PV wind power devices, which are leading globally. The large-scale implementation of Brazil's hydrogen projects will generate substantial demand for equipment procurement. Chinese hydrogen enterprises need to seize export opportunities and expand their industrial influence.

2. Increased Competitive Pressure in the International Market

After the release of Brazil's green hydrogen capacity, it will participate in global trade through carriers such as green ammonia, with target markets likely including major Asian hydrogen importers like Japan and South Korea—markets that significantly overlap with China's core target markets for green hydrogen exports. In the future, it may impact the export price system of China's green hydrogen.