Brazil: keys to support its green hydrogen plans

5 February, 2024

The journey to sustainability that Brazil, one of the world’s leading producers of clean energy, has embarked on could be accelerated with the help of so-called green or renewable hydrogen. Along the way, it aims to reduce its dependence on fossil fuels and strengthen its economic leadership in the region, as the country with the highest gross domestic product (GDP) in Latin America.

Brazil meets the conditions to become a major player in the global green hydrogen economy. In addition to a strong industry and a well-established energy infrastructure, it has vast resources.

What is Brazil’s renewable hydrogen potential?

Based on data from different industry players in Brazil, including the Ministry of Mines and Energy (MME), the country has the potential to bring its production costs below the global average. Meanwhile, Brazil’s National Secretariat for Energy Transition and Planning estimates the hydrogen production potential at 1.8 gigatonnes per year. These expectations are mainly driven by four key factors:

• Natural resources. Brazil has a rich availability of energy resources, ranging from high solar radiation in many of its regions to enormous biomass potential. Renewable energies account for 85% of the current share of production, with hydroelectric power taking the lead (64% of energy production). Let us recall that in order to be considered green or renewable, hydrogen must be produced using clean energy.
• Experience in biofuels. The country has a long history in the production and export of biofuels, especially ethanol derived from sugar cane (of which it is the world’s leading producer and exporter). Experience, know-how and some of the existing infrastructure provide a solid basis for the production and distribution of renewable hydrogen.
• A powerful industry. With a diverse economy and a strong industrial fabric, Brazil can count on economic resources and skilled labour for the hydrogen economy. The automotive sector, for example, can play a key role in the development of hydrogen-powered vehicles, especially for public transport and freight.
• Export capability. By exploiting these three advantages, Brazil has earned a leading position in export which it can use to export renewable hydrogen internationally. It has a strong port infrastructure and a diversity of global trading partners.

Brazil’s hydrogen production potential is estimated at 1.8 gigatonnes per year

What is Brazil doing about green hydrogen?

Brazil has activated different initiatives to boost investment in renewable hydrogen. In 2023, it launched the Renewable Hydrogen Pact with the support of regional governments, private associations – mainly in the field of renewable energy – and international organisations.

This pact, which will be active until 2025, seeks to strengthen the production of clean hydrogen through 65 specific actions, including investment in research, development and innovation (R&D&I).

Another milestone to boost the green hydrogen economy in Brazil is the Ministry of Mines and Energy’s 2050 National Energy Plan, which describes this energy vector as a disruptive technology and a strategic element for the decarbonisation of the country.

An additional initiative worth highlighting is the National Hydrogen Plan. It has an allocation of around 40 million euros to disseminate pilot plants throughout the country. This plan hopes to help Brazil become a competitive producer by 2030 and consolidate several hydrogen hubs by 2035.

The European Commission will invest 2 billion euros in Brazil to develop green hydrogen projects

Brazil’s potential has sparked interest in other parts of the world. During an official visit, the president of the European Commission, Ursula von der Leyen, announced the investment of 2 billion euros in the country to develop green hydrogen projects. The EU wants to import 10 million tonnes of renewable hydrogen to meet its energy transition targets, and is relying on building a transatlantic market with partners such as Brazil.

The country could lead the renewable hydrogen industry in Latin America. Its economic and industrial muscle, its experience with renewable energies and its wealth of natural resources are factors that endorse it.