The world has been debating the use of green hydrogen and its potential to contribute to the process of decarbonization of the global economy.
The focus on developing carbon-neutral energy sources and technologies, such as hydrogen, comes amid climate change and pressure for governments and countries to commit to reducing their greenhouse gas emissions.
Hydrogen has become a strategic priority in energy and climate policies around the world, not only as an energy carrier, but also because it allows for energy storage. Because of these characteristics, it can be used directly as a low- or zero-carbon energy source, and it also allows the energy sector to play an important role in segments that are difficult to mitigate, such as transportation and heavy industry. The possibility of storing the molecule also allows for greater use of intermittent renewable sources, such as wind and solar.
Several countries have launched initiatives to study the feasibility of hydrogen, aimed at supporting energy transition and post-pandemic economic recovery in these nations.
While there are a number of technological routes to producing hydrogen, one of the “cleanest” processes is electrolysis of water with electricity generated from low-carbon sources – that is, using renewable energy to break water molecules into hydrogen and oxygen.
Brazil is particularly well positioned to be a major hub for green hydrogen development, given the country’s abundant natural resources (especially hydro, wind, and solar). An example of this is the fact that, after the element was mentioned in 2020 by Germany in its Hydrogen Strategy, the Brazilian Ministry of Mines and Energy and the German government started conversations to identify possibilities for cooperation in the area.
Although the production processes and industrial use of hydrogen are reasonably consolidated, the expansion of the use of hydrogen-based energy projects will require additional investments in research, development and innovation, creating various business opportunities.
The implementation of new technologies and the development of hydrogen production, storage, transport and distribution infrastructure are being studied not only by the Brazilian government, but also by researchers from Brazilian universities in partnership with international development agencies.
In February 2021, the National Energy Policy Council (CNPE) declared hydrogen one of the priorities for research and development and, in August of the same year, the government launched the National Hydrogen Program (PNH2), aimed at creating a legal framework for the use of energy from hydrogen and a stable regulatory environment.
The movement boosted a favorable business environment and, although the specific regulatory framework has not yet been established, investors have been showing special interest in developing green hydrogen in Brazil, given the significant competitiveness of renewable sources.
At the same time, local governments have been betting on the creation of hydrogen hubs, focused on projects for direct and indirect export of hydrogen, in the form of ammonia or methanol. Ceará, for example, created a working group to develop public policies related to sustainable development and the implementation of the Green Hydrogen Hub in the Pecém Complex, leading companies such as Enegix, White Martins, and Fortescue to sign memorandums of understanding with the State, with expected investments of US$ 6 billion. In addition, EDP has already invested R$ 42 million in a pilot project in the Pecém Complex.
Pernambuco has taken a similar initiative at the Port of Suape, suggesting that the country’s large port and industrial complexes will be key to the development of a hydrogen market, since competitive logistical costs and export processing infrastructure will play an important role in the export of the product.
French company Qair Brasil has been negotiating with the government to install a green hydrogen production plant in Suape, with investments of US$3.8 billion, and also plans a plant in Ceará.
Developer Casa dos Ventos, which has a portfolio of projects with a combined installed capacity of 30 GW, has also announced investments in hydrogen. In November, it signed an agreement with the Comerc Energia group to invest $4 billion in green hydrogen projects over the next ten years.
These moves make it clear that, when it comes to investing in the transition focused on hydrogen, taking advantage of the diverse and abundant energy resources available in Brazil can be decisive for a successful business strategy.
