From Brazil’s CNG lesson to Europe’s hydrogen test

Other articles on the application of hydrogen technologies in transport are still accessible on our website: first, second and third.

The chicken-and-egg problem

Hydrogen’s promise as a road fuel has long been shadowed by a stubborn chicken-and-egg problem: drivers will not buy vehicles if they cannot refuel them, while investors hesitate to build stations before there is a sizeable fleet to serve. In Europe, that dilemma is sharpened by the high cost of fuel-cell vehicles, the need for low-carbon hydrogen, complex storage and compression requirements, and fierce competition from battery-electric cars. Yet the European Union has already acknowledged that infrastructure is not a peripheral issue but the market’s foundation: under the Alternative Fuels Infrastructure Regulation, hydrogen stations are expected in urban nodes and at intervals of up to 200 kilometres along the core TEN-T network by 2030.

For now, Europe remains well short of a network capable of reassuring ordinary drivers. The continent has moved beyond the purely experimental phase, but its refuelling map is still sparse when compared with mature fuel systems. That gap matters because hydrogen, unlike electricity, cannot lean on a ubiquitous domestic charging base. It needs visible, reliable, public-facing supply points, backed by transport, storage and maintenance systems that can operate at commercial scale.

The Brazilian experience with CNG

This is where Brazil’s experience with compressed natural gas, or CNG, becomes instructive. Brazil did not build one of the world’s largest light-duty natural gas vehicle markets by fuel availability alone. Its progress rested on a broader ecosystem: distribution networks, certified conversion workshops, fuel-price advantages, tax incentives and consumer trust. A 2022 study in Energy Policy found that Brazil had about 2.25 million natural gas vehicles in 2018, roughly 3 per cent of the national fleet, and was recognised among the leading global markets for vehicle natural gas adoption.

The Brazilian case also shows that infrastructure is never merely physical. It is institutional and economic. In Rio de Janeiro, CNG advanced because drivers had relatively broad access to refuelling stations, a large base of certified workshops and a tax regime that made conversion financially attractive. Lower fuel taxation and reduced vehicle-property tax helped shorten the payback period, particularly for high-mileage users such as taxi drivers and other professional motorists.

The contrast with São Paulo is just as revealing. São Paulo had a large gas distribution network, yet CNG struggled because ethanol enjoyed strong tax support and competed directly for the same consumer wallet. The lesson is uncomfortable but crucial: the winning fuel is not always the one with the best engineering case. It is the one supported by a coherent mix of availability, price stability, regulation and long-term political credibility. For hydrogen in Europe, targets for refuelling stations will not be enough unless the pump price, the user experience and the policy signal all point in the same direction.

Lessons from Brazil’s CNG Rollout for Europe’s Hydrogen Ambitions

Europe could adapt the Brazilian lesson by building hydrogen corridors first where demand is most likely to materialise, rather than attempting an evenly spread network from the outset. The early focus should be on taxis, corporate fleets, light commercial vehicles, airports, ports, municipal services and logistics routes where vehicles cover high daily mileage and can justify the technology faster. That was how CNG found its footing in Brazil: among users for whom operating savings were immediate, measurable and repeated every day.

A second parallel lies in certification and confidence. In Brazil, regulated conversion kits, certified workshops and technical standards helped reduce the perceived risk of switching fuels. For Europe, the equivalent would be rigorous standards for hydrogen quality, refuelling pressure, safety, maintenance, station interoperability and real-time information on station availability. Public confidence will not come from policy papers alone. It will come when drivers know that the station is open, the fuel is available, the equipment works and service support exists nearby.

European policymakers could also learn from Brazil’s use of local incentives. Brazilian states shaped the success or stagnation of CNG through fuel taxation and vehicle-property tax. In Europe, national governments, regions and cities could use comparable tools: temporary reductions in road charges, circulation taxes or registration fees for hydrogen vehicles; public procurement for municipal and commercial fleets; declining operating subsidies; and demand guarantees for stations along strategic corridors. The aim should not be permanent subsidy, but the creation of enough early density for the market to stand on its own.

Conclusion

The central message from Brazil is that alternative fuels scale only when infrastructure, price, regulation and trust advance together. For Europe, hydrogen mobility should be treated not as a single technology to be deployed, but as an ecosystem to be assembled: clean production, transport, storage, refuelling stations, maintenance, incentives and anchor users. The transition will not begin with millions of private motorists. It will begin in well-designed local markets, supported by consistent policy and a clear economic proposition for those who drive every day.

References:

• Larizzatti Zacharias, L. G. et al. (2022), Natural gas as a vehicular fuel in Brazil: barriers and lessons to learn, Energy Policy 167, 113056.
• European Commission / Clean Hydrogen Partnership, European Hydrogen Refuelling Station Availability System.
• European Hydrogen Observatory, Alternative Fuels Infrastructure Regulation summary.
• International Energy Agency, Global Hydrogen Review 2024: trade and infrastructure.