Hydrogen is considered a key fuel for the world’s sustainable future, according to a World Economic Forum report last December. Hydrogen is the most common element in the universe. On Earth it is isolated through steam methane reforming of natural gas – which involves carbon – and the use of electricity to split water into hydrogen and oxygen (electrolysis). 

Brazil’s strength in renewables means that much of its hydrogen made by the latter method could be green. Its Ministry of Mines and Energy claims that 93.1% of Brazil’s 2023 power generation was from renewable sources, mainly hydro, solar PV and wind. The country also rates highly in the Energy Institute’s Statistical Review Country Transition Tracker.

The Brazilian government is now eyeing green hydrogen for fuel cells to generate electricity and heat in electric vehicles (EVs) and buildings, and as a feedstock to produce chemicals and fuels, such as ammonia and e-methanol. Green hydrogen could also potentially decarbonise heavy emitters, such as aviation and the steel industry.  

Brazil has published a National Hydrogen Programme targeting the establishment of low-emission hydrogen hubs in the country by 2035. Data from the Ministry of Mines and Energy, quoted by the Brazilian Association of the Green Hydrogen Industry (ABIHV), suggests that that the country has the ‘potential’ to produce 1.8bn t/y of hydrogen.  

Fernanda Delgado, CEO of ABIHV, predicts that by 2050 Brazil could be meeting 4% of global demand for green hydrogen, producing 157 GW. She also suggests there could be $200bn worth of investment into green hydrogen projects in Brazil by 2050. 

Such progress would boost Brazil’s reputation as a key global carbon sink. The International Energy Agency (IEA) claims that replacing grey hydrogen from steam methane reformation with green hydrogen worldwide would reduce global CO₂ emissions by 830mn t/y, equal to annual combined UK and Indonesian greenhouse gas emissions.  

Why is Brazil competitive in green hydrogen?  
According to BloombergNEF (BNEF), ‘Brazil could produce the lowest-cost green hydrogen globally’ thanks in part to its competitive wind energy production. The country, says BNEF, ‘is already a top global destination for renewable energy investment’, having attracted nearly $35bn in 2023.

Delgado notes that was partly because of Brazil’s ‘favourable geopolitical position’, lacking conflicts with other countries and having good relations with most states. The country’s availability of land and fresh water (for electrolysis), as well as an interconnected grid, also encourage investment, she adds.

Diogo Lisbona Romeiro, a researcher at the Centre of Studies in Infrastructure Regulation (within Brazil’s Getúlio Vargas Foundation), agrees: ‘We have very competitive renewable energy, which also offers a high level of production of green hydrogen.’  

However, this is still very much in the future. At present, Delgado says: ‘There are only research and development projects within universities, [and] some pilot plants in some factories. But on a commercial scale, we still don’t have major green hydrogen projects.’ Final decisions about investments by private sector players are expected only in 2025.  

What are Brazil’s leading green hydrogen projects?
Four large projects are currently under development in Brazil.

The country’s largest green hydrogen production project is planned to be located in the Pecém Export Processing Zone, in Ceará state, north-east Brazil. This will be owned and operated by Brasil Fortescue Future Industries (FFI) (whose parent is based in Australia), and is being offered tax incentives if the project uses Brazilian goods and services and invests in research, development and innovation.

‘Fortescue foresees investments of approximately [Brazilian Reals] BRL20bn [$3.5bn]… and aims to produce 500 t/d of green hydrogen,’ a Fortescue Brazil spokesperson told New Energy World, adding that the company should begin preparing the site for construction in 2024. 

Another large-scale green hydrogen project is led by Danish renewable energy generation firm European Energy and the state-owned Brazilian oil and gas company Petrobrás. The pair signed an agreement in 2023 to evaluate potential opportunities for the installation of an e-methanol production facility in Brazil, expected to be built in Pernambuco state, eastern Brazil, with operations starting in 2H2026. 

Meanwhile, Brazilian renewable energy company Casa dos Ventos and Brazilian energy efficiency company Comerc Eficiência signed a green hydrogen partnership with the Dutch renewable energy semiconductor manufacturer TransHydrogen Alliance in 2023 to export green ammonia produced in Ceará and integrate the supply chain with the Port of Rotterdam, in the Netherlands.  

A further major project is a planned nitrogen fertiliser factory using green hydrogen in Minas Gerais state, central Brazil, by the Swiss green nitrogen fertiliser company Atlas Agro.   

In addition, Delgado says that there are many small projects focused on research and development into green hydrogen.

Indeed, several international companies are finding smaller green hydrogen opportunities in Brazil, such as Norwegian renewable energy equipment manufacturer Fuella. 

Portuguese electric utilities company EDP also launched a pilot green hydrogen project in Ceará in January 2023, investing €7.5mn. A company official said at the time: ‘EDP is working globally on green hydrogen projects, a technology that will be important to achieve global decarbonisation goals.’   

Meanwhile, the Brazilian hydroelectric power generation company Eletrobras opened a green hydrogen pilot plant in 2021, close to its Itumbiara hydroelectric plant, in central Brazil. The plant has already produced five tonnes of green hydrogen, also using photovoltaic energy.  

Furthermore, Eletrobras has signed agreements with several companies and Brazilian states ‘to study the implementation of new power plants of green hydrogen production’.

Brazil’s National Confederation of Industry (Confederação Nacional da Indústria – CNI), has said more than 60 green hydrogen projects have been announced in Brazil, totalling BRL188.7bn ($33.15bn), of which BRL150.3bn ($26.4bn) are in Ceará.

‘By 2050 Brazil could be meeting 4% of global demand for green hydrogen, producing 157 GW.’ – Fernanda Delgado, CEO, ABIHV

What about regulations?  
A significant advance in hydrogen generation was taken in August 2024, when Brazil’s National Congress passed a law (No 14,948) to promote a low-carbon hydrogen industry in Brazil. Delgado explains: ‘The law establishes certification, regulation and all exemptions for the hydrogen industry.’

A supplementary law authorising credit incentives was sanctioned in September 2024. From 2028 to 2032, BRL18.3bn ($3.2bn) will be distributed to companies making low-carbon hydrogen.

Thanks to these incentives, and expectation of a drop in the price of components, cheap electricity in Brazil and increased availability of electrolysers worldwide, Delgado believes in ‘the possibility of a good price reduction’ for green hydrogen in Brazil.  

Researcher, Romeiro goes even further, suggesting that the new legislation will encourage production to a similar extent as the Inflation Reduction Act in the US and the RenewableEU initiative in the European Union.

What will they do with it?   
Romeiro also notes Brazilian green hydrogen is mainly being developed for export through hub ports and as green ammonia, which is easier to ship than hydrogen.  

For example, the state of Ceará, whose port is part-owned by the Port of Rotterdam (to boost trade flows to Europe), has made many efforts to develop green hydogen. The US-based Climate Investment Funds has also invested in the region’s port infrastructure. In June 2023, the company announced an expenditure of $70mn to boost energy transformation in Brazil, stressing: ‘A robust green hydrogen value chain could make Brazil, which exports 20% of the world’s iron, a leader in green steel production.’

Romeiro adds that domestic demand may also grow in these hub areas, especially when electrolysers become less expensive. He also sees benefits in decentralised hydrogen production, in which local industries produce hydrogen at the point of consumption, cutting transport costs. Green hydrogen can deliver greater added value in sustainable products, such as green steel, he stresses.  

Since Brazil has just approved a law supporting development of green diesel, sustainable aviation fuel and biomethane, synthetic fuels integrating green hydrogen, Romeiro expects green hydrogen to aid automotive sector fuel supplies too. Likewise, he suggests, Brazil has the resources to explore building hydrogen-powered vehicles.  

For the ABIHV’s Delgado, the mining sector is a key stakeholder, as a major investor in the green hydrogen sector in Brazil, helping to produce battery minerals for electrification applications.  

Green hydrogen might also reduce Brazil’s oil sector carbon footprint, with greener refining. Brazil is Latin America’s top oil producer, at an average of 3.5mn b/d in 2023, according to the Energy Institute’s Statistical Review of World Energy. It owns the largest recoverable ultra-deep oil reserves in the world, according to the US International Trade Administration.  

Challenges to overcome
Looking ahead, Delgado says that more transmission lines are needed to bring more energy to the locations where hydrogen plants will be located. Also needed is better port infrastructure for export, and improved local roads. ‘There has to be a consumer market, infrastructure and logistics for this new industry,' she says.  

Romeiro maintains that over time, as green hydrogen projects scale up, the cost of electrolysers and logistics will decrease, bringing the cost of green hydrogen towards that of conventional hydrogen. He warns: ‘Worldwide, there’s a certain hype about hydrogen, but converting this into reality isn’t simple. These cost curves have to be reduced.’  

• Further reading: ‘How Brazil beats many richer nations in renewables’. Brazil looks set to be a world-leading trailblazer in adopting renewable energy. Find out how abundant natural resources, imported know-how and technology, combined with new regulation, have helped grow clean energy adoption by Latin America’s largest country.
• Find out why biofuels, including ethanol produced largely from the country’s sugar cane sector, are big in Brazil.