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Chaves opposes the proposed green hydrogen measure

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The measure to promote the production of green hydrogen in Costa Rica is opposed by the president of the republic, Rodrigo Chaves Robles, since it may endanger public budgets.

When questioned about the idea this Tuesday during his visit to Limón, the president said that, if the deputies definitively approve it, he will carefully examine the proposal.

A legality challenge brought by the deputies of the ruling Social Democratic Progress Party (PPSD) and the Progressive Liberal Party halted the voting during the second discussion in the parliamentary session (PLP).

“First, we must wait for the Constitutional Chamber to make a decision; then, we must observe the deputies’ choice. I’ll do my analysis there, the president declared.

“I think this nation has a lot of promise for green hydrogen since we have plenty of the two ingredients needed to make it: water, energy, and generating capacity, notwithstanding Acueductos y Alcantarillados’ (AyA’s) minor issues. I do not want to jeopardize public funds or give in to an industry’s demands, he continued.

The law defines “green hydrogen” as energy produced from renewable resources using a method that emits less carbon dioxide, such as electrolysis, photolysis, thermolysis, biophotolysis, or any other environmentally friendly technique.

The text would permit public companies like the National Power and Light Company (CNFL), the Costa Rican Oil Refinery (Recope), the Public Services Company of Heredia (ESPH), the Administrative Board of Electrical Services of Cartago (Jasec), and the rural electrification cooperatives to enter the green hydrogen market.

Congressmen contended, among other things, that the measure would lack scientific studies that explain the consequences on public finances of tax incentives for new productive industries. This was one of the main points made by the congressmen who triggered the constitutional consultation before Chamber IV.

Through a 15-year incentive scheme, the effort seeks to promote the production and sale of green hydrogen. People who invest in “research, production, transformation, storage, transport, and ultimate use of green hydrogen” are free from paying taxes, whether they are natural or legal persons.

includes five years of exemptions of up to 100% from value-added taxes, tariffs, levies, fees, or contributions on imports and local purchases of products, equipment, and machinery essential for and connected to “the growth of the activities of production and transformation of green hydrogen.”

For businesses or people who begin green hydrogen-related operations between the sixth and tenth years of the law, tax rate savings will be 75% for the remainder of the term; however, starting with the eleventh year, the tax advantages will be decreased to 50% until the 15-year period has passed.

Rodrigo Chaves stated in response to a probable veto of the law, “To be very explicit, I love the idea, I think we have a lot of potentials to develop it, and we will examine it after the Constitutional Chamber has determined, that the deputies have given their judgment constitutional sovereign.

To prevent those two things—to accommodate anything to someone whose interest I am unsure of and, more importantly, not to jeopardize the State’s financial position—we will evaluate that statute with the attention it requires.

The members of the ruling party Manuel Morales Dáz, Daniel Vargas Quirós, Ada Acua, Jorge Rojas, Waldo Agüero, and Luz Mary Alpzar signed the consultation before Chamber IV.

Gilberto Campos, Luis Diego Vargas, Kattia Cambronero, Jorge Dengo, and Johana Obando, all PLP members, joined these. According to his office, this group’s head, Eli Feinzaig, would sign this document on Tuesday.

Erwen Mass, a representative of the Christian Social Unity Party (PUSC), who has since been selected by the current administration to serve as an advisor to the Central American Bank for Economic Integration, made the idea during the Legislative Assembly’s last session (CABEI).

Arnes Biogradlija
Creative Content Director at EnergyNews.Biz

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