At an estimated production cost of €2.50 per kilogram—half the price of Europe’s subsidized hydrogen—Brazil is positioning itself as a low-cost exporter in the global green hydrogen market. Backed by over €1.3 billion in investments, H2Brazil’s twin projects in Uberaba and Açu signal a strategic move to industrialize hydrogen at scale by leveraging the country’s renewable-rich power grid and export-oriented infrastructure.
Uberaba: Scale, Synergy, and Export Readiness
The centerpiece of H2Brazil’s strategy is its 820MW electrolyzer-based complex in Uberaba, Minas Gerais. The facility aims to produce 125,000 tonnes of hydrogen annually, feeding 700,000 tonnes of green ammonia, a volume large enough to support fertilizer production, methanol synthesis, and hydrogen derivatives for export. The plant is being developed within the ZPE (Zona de Processamento de Exportação), optimizing it for international trade through tax and regulatory benefits.
Critical to the economics of the Uberaba site is Brazil’s energy matrix, composed of over 80% renewables, mainly hydroelectric, wind, and solar. This allows for Power Purchase Agreements (PPAs) at far lower cost than in Europe, with none of the geopolitical volatility seen in fossil-fuel-dependent grids. H2Brazil is in the final stages of securing a supply agreement with Cemig, the Minas Gerais state utility, which would ensure stable renewable electricity over the long term.
The Uberaba project is designed with industrial clustering in mind. The state’s agribusiness economy, existing rail links, and port access via Santos provide a clear logistical path from production to global markets. The project is expected to generate approximately 1,000 direct jobs and contribute to downstream decarbonization beyond borders.
Açu Pilot: De-Risking and Technological Flexibility
Complementing Uberaba is a smaller pilot at Açu Port in Rio de Janeiro state, planned at 15–20MW capacity with an investment between €40–50 million. While modest in scale, this pilot allows H2Brazil to refine operational models, validate regulatory frameworks, and test port-based logistics for hydrogen export. The site also offers flexibility for future scaling based on market signals and regulatory clarity.
Açu’s proximity to Brazil’s southeastern industrial corridor adds a layer of strategic optionality. If domestic hydrogen demand accelerates—particularly from petrochemicals or refining—the port location could serve dual roles in both import substitution and export development.
Europe’s Cost Problem, Brazil’s Opportunity
H2Brazil’s comparative advantage is underpinned by Europe’s current hydrogen cost structure. Even with subsidy programs such as the EU Hydrogen Bank and Carbon Contracts for Difference, green hydrogen prices in Europe remain near €5/kg, according to recent estimates by the European Hydrogen Observatory. In contrast, Brazil’s clean grid and favorable permitting environment create a floor price competitive with domestic grey hydrogen, without subsidy.
This pricing differential opens up significant market space in Europe and Asia for Brazilian ammonia and methanol produced from renewable hydrogen. At the Rotterdam World Hydrogen Summit, where Uberaba’s project contract was signed, interest from international offtakers and financiers highlighted Brazil’s emerging credibility as a serious hydrogen exporter.
Infrastructure and Policy Alignment as Critical Enablers
The success of H2Brazil’s strategy hinges not only on price competitiveness but also on infrastructure alignment and policy consistency. Brazil’s existing transmission network, port access, and export-friendly industrial zones allow it to move from project concept to implementation faster than countries still struggling with permitting and infrastructure build-out.
However, challenges remain. Large-scale water access, electrolyzer deployment at scale, and integration into global certification schemes for green hydrogen exports—such as CertifHy or the upcoming EU Renewable Fuels of Non-Biological Origin (RFNBO) standards—will be critical. H2Brazil’s COO, Nathália Ervedosa, points to regulatory cooperation as essential to unlocking broader industrial decarbonization: “Access to infrastructure and clear rules allow us to deliver hydrogen at prices the market can absorb.”
Investment Signals and Sectoral Implications
With €1.3 billion committed across both projects and further capital raising underway, H2Brazil exemplifies a shift from pilot-scale hydrogen concepts toward bankable industrial operations. If successfully executed, the Uberaba plant could become one of the largest hydrogen and green ammonia production sites in the Global South, providing lessons for countries seeking to build hydrogen economies without relying on heavy subsidies.
These investments also highlight where green hydrogen can be immediately competitive: in countries with low-cost renewables, stable electricity markets, and clear export pathways. Brazil checks all three boxes, and for now, H2Brazil’s dual-track strategy—industrial scale at Uberaba and de-risked pilot at Açu—could serve as a blueprint for others navigating the economics of hydrogen deployment in emerging markets.
