Shell and Porto of Açu in Brazil have agreed to develop a green hydrogen plant together, according to Reuters, a partnership that may see the up-and-coming technology debut in South America’s largest country.
The companies will develop a 10-megawatt green hydrogen plant on the grounds of Açu in Brazil’s Rio de Janeiro state, according to a memorandum of understanding. The factory is expected to be finished in 2025.
Green hydrogen is a zero-carbon fuel produced by splitting water into oxygen and hydrogen using renewable energy. It is increasingly being marketed as a solution to clean up emissions-intensive industries like refining and agriculture.
Prumo Logistica SA, which is managed by US private equity firm EIG Global Energy Partners, owns Açu, a vast industrial complex, and port.
Under the parameters of the MoU, two alternative stages of the project would raise production to 100 megawatts by 2029. According to a Shell spokeswoman, the first phase would likely require $20 million to $40 million in expenditure, but those figures are open to change.
While other firms have suggested constructing green hydrogen facilities in Brazil, the Shell-Açu agreement stands out as a project that will get underway soon, with production beginning in three years. The majority of projects planned in Brazil have not progressed beyond the idea or viability stages.
The existing consumer market is quite tiny. In a joint interview, Monique Gonçalves, head of regulatory relations for Shell in Brazil, and Mauro Andrade, executive director of business development at Prumo, said that by establishing the supply of green hydrogen, the consortium wants to boost demand while accelerating green hydrogen consumption at large.
Andrade explained, “The goal is to evaluate the market for green hydrogen in Brazil.” “We’d also like to test off-takers outside of Brazil. Everyone speaks about green hydrogen, but there aren’t many takers on the market right now.”
The money for the facility will come from a fund that Brazil’s oil regulator mandates each producer to set aside for research and development initiatives.
