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Low Carbon Hydrogen Projects In Brazil Sum R$ 188 Billion. Port Of Pecém (CE) Leads Investments. Law 14,948 Marks Historic Moment.
Investments in low carbon hydrogen projects in Brazil reach an impressive R$ 188 billion, as revealed by CNI’s research. The Port of Pecém, located in Ceará, is leading in investments, receiving the largest portion of allocated resources. This milestone represents a significant advancement in the production and use of this source of energy in the country.
The new legislation, known as Law 14,948, is a crucial point for low carbon hydrogen in Brazil. A recent study highlights the possible applications and benefits of hydrogen production, especially in the most impacted sectors. Interest in green hydrogen is also growing, given its potential to transform the national energy matrix and promote a more sustainable future. By adopting new technologies, Brazil can become a global leader in clean energy, evidenced by the size of the resources being invested.
Historic Moment For Brazilian Industry
The establishment of Law No. 48 represents a historic moment for the Brazilian industry. Similarly to the Oil Law, which was essential for the exploration of hydrocarbons in Brazil in 1998, this legislation signals the beginning of the hydrogen chain development. Such a measure reinforces the country’s commitment to decarbonizing the economy, becoming a fundamental milestone in this context.
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There are already announcements of investments in more than 20 hydrogen projects from renewable sources in Brazil, totaling R$ 188.7 billion. The low cost and flexibility in the supply of renewable electricity generation give the country a considerable competitive advantage. Due to these factors, there is a strong expectation that Brazil will produce hydrogen at one of the lowest global costs by 2030.
Economic Production Expectations
This information is detailed in the study Sustainable Hydrogen: Perspectives for Development and Potential for the Brazilian Industry, prepared by the National Confederation of Industry (CNI). It was released this Monday (26). The CNI plays a catalyzing role in engaging the industrial sector in this dynamic process of transformation.
Through the Sustainable Hydrogen Industry Committee, the CNI works in collaboration with companies and other stakeholders to disseminate knowledge, monitor, and discuss relevant public policies. One of the most notable initiatives was the creation of the Sustainable Hydrogen Industry Platform. This tool facilitates the tracking of business initiatives and public policies related to sustainable hydrogen, details CNI President Ricardo Alban.
Hydrogen And Its Industrial Applications
Hydrogen produced from renewable sources or from fossil sources with carbon dioxide (CO2) capture and storage is being seen as an effective strategy for decarbonizing sectors known as ‘hard to abate’. This includes industries that require high-temperature heat, such as those in steel, glass, chemicals, aluminum, and fertilizers.
Diverse Brazilian ports are developing projects to become low-carbon hydrogen hubs, aligning with the chain of activities for production, transport, delivery, and end use of this form of energy. Among the highlighted investments, the Port of Pecém (CE) stands out as the destination with the highest financial input – approximately R$ 110.6 billion.
Strategic Investments And Partnerships
This hub in Ceará was inaugurated in February 2021 by the state government, in partnership with the Federation of Industries of Ceará (FIEC), the Federal University of Ceará (UFC), and Pecém Complex (CIPP S/A). Since then, 34 memorandums of understanding have been signed that evolved into four pre-contracts with national and international companies. According to CNI, notable are also the ports of Parnaíba (PI) with R$ 20.4 billion; Suape (PE) with R$ 19.6 billion; and Açu (RJ) with R$ 16.5 billion in investments.
The enthusiasm around the export of hydrogen and its derivatives is associated with the availability and competitive cost of renewable electricity in the country, as well as European interest in importing these products. Recently, Germany organized an international auction for the purchase of green ammonia, a derivative of low carbon hydrogen.
Green Ammonia In The International Market
Ammonia is one of the most in-demand industrial hydrogen chemicals. In 2021, global production reached 190 megatons of ammonia, consuming about 34 megatons of hydrogen, according to the International Energy Agency (IEA). In Brazil, ammonia production utilizes approximately 145 thousand tons of hydrogen per year.
This chemical compound plays a crucial role in agriculture and, therefore, in global food security, as 70% of its production is intended for nitrogen fertilizers. With Brazil still importing a significant amount of these fertilizers, the internal development of ammonia through low carbon hydrogen can balance the trade balance and meet the goals of the National Fertilizers Plan 2050.
Logistics And Research With Hydrogen
A two-year agreement between Vale and Petrobras, focusing on low carbon projects, pointed to ammonia as an alternative for logistics activities. The mining company has been studying since 2021, along with other agents, the possibility of using green ammonia as a marine fuel for its robust fleet.
Strategic Energy Generation Capacity
According to CNI, the largest electrolyzer capacity project is planned for the Port of Parnaíba, with 10 GW of power – enough to supply 15 million people, surpassing the population of São Paulo city. However, it is Ceará state that has the largest installed capacity, with about 15.9 GW. Followed by Piauí with 15.6 GW, and Rio de Janeiro with 2.1 GW.
Currently, 87 countries have at least one low carbon hydrogen production project. Germany, the United States, and Australia lead the initiatives, showing strong commitment to public policies to increase the production of low carbon hydrogen.
Growing Global Demand For Hydrogen
The produced energy is primarily consumed by the mobility sector, followed by electricity generation, industrial use, and ammonia production. This variety of applications highlights the importance of hydrogen in the global energy transition.
Although the primary goal of the announced projects is export, developing low carbon hydrogen production in a decentralized manner in Brazil, utilizing grid electricity or distributed generation, is the most viable approach to integrate the national industry.
Future Perspectives And Self-Sufficiency
Among the advantages of this local production are the elimination of hydrogen transportation costs, the use of decarbonized electricity from the Brazilian grid – 92% coming from renewable sources in 2022 – and the optimization of industrial processes. Smaller scale production can leverage projects more quickly and with lower commercial complexity.
CNI believes that such initiatives will be essential for Brazil to fully leverage its potential for green hydrogen production, aligning economic development with environmental sustainability.
Source: CNI Press
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