Sustainable Industry

Brazil could be the leading exporter of the fuel of tomorrow

Country makes strides in technological partnerships with other nations for the production of green hydrogen. Ceará could produce 13% of the world’s green hydrogen by 2050

Green hydrogen represents a global commitment to a low-carbon economy, and is hailed by the International Energy Agency (IEA) as one of the energy sources with the greatest potential for disruption. Using the fuel of tomorrow is part of the energy strategy of at least 33 countries, according to the Global Wind Energy Council (GWEC). In order to make this market viable, foreign companies have stepped up partnerships in Brazil, with an eye on the country’s significant potential of the wind and solar sectors.

Hydrogen as a fuel is obtained through electrolysis, a chemical method that uses electric current to separate hydrogen from oxygen in the water. It is called green hydrogen when the electricity comes from renewable sources. One of Brazil’s strengths is precisely its renewable generation mix, and the country could become an exporter of this fuel in a few years. The country needs to overcome technological and regulatory challenges before it can achieve this.

The color scale is intended to indicate how the hydrogen was produced. In addition to green, there is blue hydrogen, which is obtained from natural gas through technologies for capturing, utilizing and storing carbon. In contrast, gray hydrogen is produced from natural gas, but without reducing greenhouse gas (GHG) emissions. Brown hydrogen is produced from mineral coal and also obtained from biomass or biofuels through methods such as gasification or anaerobic biodigestion.

Once it is separated from oxygen in this electrolysis process, hydrogen can have multiple applications. A very common application is in the production of hydrogenated fat, which is used to make margarine. Hydrogen is also used in the steel industry and as a transport fuel.

A major advantage of hydrogen is that it is considered an energy vector, i.e., it allows the storage of energy to be used in other sectors, which supports integration. “In some experiments, instead of producing electricity to send it to the grid, in an offshore [wind farm] tower it directly produces green hydrogen. It has an electrolyzer at the base. Instead of carrying electricity, it carries hydrogen,” explains Jurandir Picanço, from the energy center of the Federation of Industries of the State of Ceará (FIEC).

In light modes of transportation, hydrogen is a sustainable option for the vehicle electrification process. When burned, it does not produce carbon dioxide, one of the gases responsible for intensifying global warming. Hydrogen is also an alternative for sectors where carbon emissions are hard to abate.

A study by the Hydrogen Council published in February shows that 18% of the global energy demand will be for hydrogen by 2050. At this level, annual CO2 emissions would be reduced by about 6 Gt compared to current technologies, according to the report prepared by the initiative launched at the World Economic Forum.

On the other hand, according to a report by the Energy Transitions Commission (ETC), a think tank specializing in economic growth and climate change mitigation, in a scenario where hydrogen accounts for 15-20% of all global energy demand — equivalent to a five- or seven-fold increase in the current demand —, the investments required by 2030 would be in the order of USD 800 billion per year considering everything from energy sources to electrolysers. This jumps to USD 15 trillion by 2050.

Brazil could become a green hydrogen hub

Driven by the interest expressed by foreign institutions, projects for the commercial production of green hydrogen in Brazil now exceed USD 20 billion, with a major focus on the export market. Today, the main initiatives are being carried out in the ports of Pecém (Ceará); Açu (Rio de Janeiro); and Suape (Pernambuco).

In Ceará, at least nine companies, including Australia’s Energix Energy and Fortscue, France’s Qair, and Brazil’s White Martins and Neoenergia, executed memoranda of understanding from February to September for the production of sustainable fuel. In September, the Portuguese multinational EDP announced the first H2V plant in Ceará, which is expected to become operational in 2022. The investment involved is BRL 42 million and the gas production capacity will be 250 Nm3/h.

If half of the potential of solar and wind energy — the two fastest growing renewable sources in Brazil — is allocated to H2V, Ceará could produce around 20 million tons of green fuel, which accounts for 13% of the global market estimated for 2050, according to FIEC data. This estimate is based on figures from the International Energy Agency and the outlook for the energy sectors, says Jurandir Picanço, from the FIEC energy center.

“One thing we have for sure today is the interest expressed by companies around the world in developing projects in the state of Ceará. There are several companies considering ways of setting up business in Brazil. A market for green hydrogen market will develop, and conditions in Brazil, particularly in the Northeast, are expected to be excellent. The competition will take place at the global level since numerous countries are developing their own projects. Brazil is now perceived as a major player in this market,” says Jurandir.

FIEC is part of a Working Group created to develop public policies on renewable energy for the establishment of the Green Hydrogen HUB in Ceará. A key strength of Ceará are the capabilities available at the Port of Pecém, a semi-pubic enterprise with a controlling interest by the government of Ceará and the Port of Rotterdam, which intends to become a hydrogen importer in Europe. This enterprise comprises an industrial area, the port and an Export Processing Zone (EPZ).

The intention is that all stages of the green hydrogen production process — including electricity generation, water electrolysis, storage, and transport — take place on site for exporting the fuel. The same approach is used at Port of Açu.

Job market

In addition to contributing to a low-carbon global economy, the development of green hydrogen will energize the job market in Brazil. According to the government of Ceará, one of the units in the Port of Pecém alone is expected to create 2,500 jobs on-site and about 800 jobs once the company becomes operational in 2025.

Published by the MME, the study “Profissões do Futuro na Área de Energia e Implicações para a Formação Profissional” (Professions of Tomorrow in the Energy Sector and Implications for Vocational Training) points out that the sector will need station and energy systems operators with a strong background in computing. The jobs will be related to the improvement of hydrogen production, storage, distribution, and use processes, and the development of feasibility and scale studies for its production.

Thinking about the training of this workforce, National Service for Industrial Learning (SENAI) has several education and training, vocational, undergraduate and graduate programs on ​​environment and renewable energies aimed at those workers who will play a key role for the industrial sector today and in the future. The portfolio includes a pioneering course in Brazil for those who want to work with ​​green hydrogen.

Green hydrogen is key in the energy transition

As an energy vector and a sustainable fuel alternative, green hydrogen has bee gaining prominence in the energy and climate strategy of several countries since 2018. This trend has gained momentum as a result of the changes caused by the Covid-19 pandemic and also the efforts to accelerate the energy transition in countries with high greenhouse gas emissions, in line with the goals under the Paris Agreement.

The update for the US plan released in 2020 set goals for hydrogen and related technologies to become competitive by 2050.

South Korea intends to reach capacity to produce 6.3 million fuel-cell electric vehicles and establish 1,200 recharging stations by 2040. Japan and Australia have also articulated their energy policies around the fuel of the future.

In Europe, the Hydrogen Development Plan for the Energy Transition announced by France in June 2018 includes targets of 20-40% use of low carbon hydrogen in industrial hydrogen applications. In contrast, when launching its National Hydrogen Strategy in June 2020, Germany reinforced the funding in excess of €1 billion to be allocated to hydrogen under the 2020-2023 German Decarbonization Program with an additional €7 billion to catalyze the development of the German market and €2 billion for international partnerships.

The need for these countries to achieve sustainable goals, in addition to the limited availability of renewable energy sources at the domestic level, has led to the search for partnerships that boost the global supply chain and that meet existing and future demand.

The partnerships are intended to speed up cost reductions for this technology. Given this backdrop, Brazil could become an exporter of this fuel due to the significant share of renewables in its energy mix. According to the Ten-Year Energy Plan prepared by the Energy Research Company (EPE, in the Portuguese acronym), the expanded supply of electricity by 2030 will come from wind farms — an expansion of 16.4 GW. Photovoltaic generation will account for the increase of 5.3 GW.

Hydrogen is also part of the 2050 National Energy Plan signed off by the Ministry of Mines and Energy in December 2020. Hydrogen is expected to be blended in natural gas pipelines at limited amounts and pressures for transport and storage purposes in order to enhance the use of these pipelines and use hydrogen as a source of energy. H2V is also expected to be used in Brazil to help mainstream electric vehicles into the transport sector.