Brazil’s ambition to become a global green hydrogen exporter has hit a critical regulatory roadblock. On July 3, the Federal Public Ministry (MPF) filed a civil action seeking the immediate suspension of all activities at a hydrogen production facility under construction in the Export Processing Zone (ZPE) of Parnaíba, Piauí.
Prosecutors allege that the project’s environmental licensing process violated federal laws and ignored key conservation protocols. The project, located near the ecologically sensitive Parnaíba River delta, had received preliminary (LP) and installation (LI) licenses from the State Secretariat for the Environment and Water Resources (Semarh). But according to the MPF, the environmental impact study failed to account for the federally protected Parnaíba Delta Environmental Protection Area (APA), bypassing required consultation and approval from ICMBio—the Chico Mendes Institute for Biodiversity Conservation.
Central to the lawsuit is the claim that the APA, a federal conservation unit with ecological and hydrological significance, was entirely excluded from the Environmental Impact Assessment (EIA). Under Brazilian law, any infrastructure project that could affect federal conservation areas must be evaluated with the participation of ICMBio. The Ministry argues that the hydrogen facility’s proximity to protected wetlands necessitates federal—not state—oversight, as well as a water use concession from the federal government, which was not obtained.
The MPF also flagged failures to consult traditional and indigenous communities in the area—violating Brazil’s obligation to conduct free, prior, and informed consultations under both national and international frameworks, including ILO Convention 169. Furthermore, invitations to the project’s public hearing were sent with minimal notice—some on national holidays or the same day—undermining the legitimacy of the consultation process.
Prosecutors argue the licensing process was improperly segmented. Rather than requiring a full environmental license with federal input, the state authority granted the project separate LP and LI licenses under an expedited timeline. This segmentation is seen by legal experts as a loophole often used to rush industrial permitting through state channels while avoiding broader federal scrutiny.
Additionally, the MPF stated that the mandatory public notice for the hearing was never published in the state’s official gazette (DOE), a legal requirement designed to ensure transparency and civic engagement.
The legal filing requests that all current project activities be suspended immediately and that any future licensing be transferred to Ibama, Brazil’s federal environmental authority. The prosecutors are also calling for a daily fine of R$1 million (approximately $183,000 USD) if the company does not comply with the suspension order.
The MPF’s intervention could have broader ramifications for Brazil’s hydrogen development ambitions. With the country positioning itself as a low-cost hydrogen producer—thanks to abundant wind and solar resources—ensuring environmental and social safeguards remains critical, particularly in coastal and biodiversity-rich areas.
In response to the allegations, Semarh asserted that it has acted within the bounds of existing legal frameworks and will formally address the concerns raised by federal prosecutors. The agency has not indicated whether it will voluntarily halt project activities.
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