Porto do Pecém, about an hour’s drive north of Fortaleza, is one of the towns that, despite its lack of popularity, has the potential to become a worldwide hub in the new economy.
At least five significant corporations have already pledged to invest R$90 billion, or 60% of Ceará’s GDP, in the production of “green hydrogen” there.
Hydrogen has been one of the world’s most crucial bets for decarbonization in the year 2050. According to UN estimates, the product created by the separation of the water molecule (the well-known H2O) will be worth $2.5 trillion per year in two decades.
The wager is made for a very straightforward purpose. In terms of electricity generation, hydrogen is significantly more efficient and less expensive than fossil fuels.
However, in order to do so, it is required to modify the method hydrogen is created, which has at least three definitions: gray, which is produced using fossil fuels, blue, which is produced using carbon capture, and green, which is produced using renewable energy.
The third option is still the most expensive, at around $5 per kilogram compared to $1-3 for hydrogen produced from fossil fuels. The prices are still largely based on a small manufacturing scale.
Countless businesses and technological behemoths, such as Australia’s Energix, are betting on changing this reality.
With a $5.4 billion investment, the business claims to create 600,000 tons of green hydrogen in Pecém, a huge quantity that should generate 3.3 Gw of solar and wind energy (15 percent of Brazil’s current capacity in both sources) only to maintain the plant.
In a simple estimate, this equates to around 2.55 billion liters of gasoline, given that 1 kilogram of hydrogen creates 3.2 kilograms of gasoline (and 1 kg of gasoline at 1.35l).
In actuality, a kilogram of green hydrogen costs roughly R$27.5, making the fuel that generates zero grams of CO2 the same price as R$6.47 for gasoline.
The point is, of course, that hydrogen generation is still in its infancy on a worldwide scale, with some speculating that it may cost up to 5 times less. In practice, a plentiful fuel that might replace the major CO2 emitters, gasoline, diesel, and coal.
This is a bet that has brought together investment funds like Bill Gates’ Breakthrough Ventures and companies like CSN, Companhia Siderrgica Nacional, which is betting on green hydrogen to eliminate carbon emissions from steel and cement production (cement production now accounts for 15% of global CO2 emissions).
Another billionaire project, that of France’s Qair, is located a bit farther south in Suape and is expected to generate another 260,000 tons per year.
To put that into context, the globe generated roughly 360,000 tonnes of green and blue hydrogen in 2019, with 7.3 million tonnes predicted by 2030.
Brazilian projects provide for more than 20% of the predicted increase in supply, yet they still only meet a small portion of demand.
Currently, the globe utilizes 72 million tons of hydrogen in chemical and steel manufacturing processes, with gray hydrogen accounting for nearly all of it. This process alone emits 720 million tons of CO2, which is equal to the combined emissions of England and Indonesia.
However, the expectation thus far is that all of the hydrogen produced here will be exported, which explains the presence of port hubs near Europe.
By 2030, the European Union is expected to invest roughly 60 billion euros in green hydrogen, with a portion of these funds going to partner nations that can deliver the fuel to the old continent.
This is because it takes at least 9 liters of water to produce 1 kilogram of green hydrogen.
Brazil has already guaranteed at least $22 billion in investments in three hubs, including the Port of Açu in Rio de Janeiro.
When finished, the Energix project is expected to boost Ceará’s export basket by twofold, doubling the state’s overall exports.
