Fortescue is stepping onto the international stage with a grand ambition—to bring the benefits of green hydrogen to the northeastern Brazilian state of Ceará.
Fortescue’s vision in Brazil involves a colossal green hydrogen project, set in the Pecém industrial and port complex. This project is designed to be developed in three phases, with the initial two phases contributing a capacity of 1,200MW and the third phase adding another 900MW. In total, the project holds the potential to churn out 837 tons of green hydrogen per day, all derived from a staggering 2,100MW of renewable energy.
To move ahead, Fortescue has already taken steps. They submitted an environmental impact statement and report for their green hydrogen plant in August. Now, the next crucial step is to apply for the deployment license and the operating license.
While Fortescue is poised to take green hydrogen to new heights in Brazil, one significant roadblock stands in their way—regulations. The green hydrogen sector in Brazil lacks the necessary legal frameworks to provide the desired level of legal certainty for investors.
A Multibillion-Dollar Endeavor
The investment required for this monumental green hydrogen endeavor is substantial. Fortescue envisions multibillion-dollar investments that should commence within this decade, spanning from 2027 to 2030. However, the company emphasizes that these investments will only proceed if the project is deemed competitive.
As is common with large-scale initiatives, this project has the potential to generate employment and income, offering a promising future for the region.
A project of this magnitude requires a collaborative financial model. Fortescue anticipates a blend of private banks, state-owned banks such as BNDES and BNB, and multilateral institutions coming together to finance the project. Each bank is expected to contribute according to its strengths, ensuring a robust financial foundation for the project.
The good news is that Fortescue’s green hydrogen project has already piqued the interest of many financial institutions, with 15 banks expressing their enthusiasm for green hydrogen projects in Brazil.
Engineering Needs and Job Creation
The undertaking of producing green hydrogen on a gigawatt scale requires significant engineering expertise. This demand for process engineering on such a massive scale has never been witnessed before. It translates into the creation of numerous jobs and the emergence of new opportunities in engineering, procurement, construction, and the renewable energy sector.
The ripple effect of the project extends beyond the production of green hydrogen; it lays the groundwork for the development of more renewable energy projects, amplifying the impact on job creation and industrial growth.
While the Northeast region of Brazil is most competitive for green hydrogen projects due to its abundant renewable energy sources, Fortescue envisions a broader impact. The Southeast and South regions, too, could become hubs for supplying equipment to the green hydrogen industry. This mirrors the trajectory of wind and solar energy, where these regions have become vital in supplying equipment to the energy sector.