Hydrogen could spark a new economic cycle for Brazil and benefit ports, experts say

Brazilian ports need to be prepared for the new demand as they work towards decarbonizing their own operations (Vanessa Rodrigues/Arquivo AT)

Investments in green hydrogen could represent a new economic cycle for Brazil, according to experts interviewed by A Tribuna. Land and maritime transport are included in this context.

Rosana Santos, Director of the Instituto E+ Transição Energética, states that the possibility arises from the abundance of high-quality renewable resources available in the country, coupled with the high demand for low-carbon emission products.

The National Policy on Low-Carbon Hydrogen, also known as the Green Hydrogen Framework, signed into law by President Luiz Inácio Lula da Silva (PT) earlier this month, aligns with this proposal.

“There is efficiency in the process, and this hydrogen comes at a naturally lower cost compared to our international competitors,” Rosana explains.

Since legal certainty is crucial for investments, the director of Instituto E+ Transição Energética considers the newly signed legislation very important for green hydrogen production in Brazil. “The framework defines who does what within this hydrogen chain, what can be considered as low-emission hydrogen, and it is crucial for setting production standards.”

In addition to certifications, the Green Hydrogen Framework creates incentive mechanisms to increase the attractiveness of energy production projects. The Federal Government will offer R\$ 18 billion in tax incentives over the next five years to decarbonize industry and transport.

According to Minister of Mines and Energy Alexandre Silveira, Brazil already has over R\$ 200 billion in green hydrogen projects announced under the National Hydrogen Program (PNH2).

According to the Ten-Year Energy Expansion Plan 2031, developed by the Energy Research Company (EPE), linked to the Ministry, Brazil has the technical potential to produce 1.8 gigatons of hydrogen per year, with approximately 90% of this volume using renewable energy sources.

For Luciana Moreira, consultant at GO Associados, government incentives play a key role in making the country competitive in the international market. “Brazil is not currently competitive in green hydrogen production costs, mainly due to the high government incentives for renewable energy production in other countries”, she says.

However, she notes that McKinsey & Company studies indicate that by 2030, Brazil could have the most competitive green hydrogen in the world. “Brazilian ports need to be prepared for this new demand while working on the decarbonization of their own operations,” she adds. “This requires adaptation of port infrastructure and aligns with the ESG Agenda, which some national ports are already committed to, such as the Port of Santos”, the consultant concludes.

According to Rosana Santos, this adaptation will be enabled by the Framework. “It will allow ports to prepare to receive these hydrogen production facilities or industrial plants,” she says. “Ports can manufacture the fuel and synthetic products to fuel ships,” she adds.

“If there is an industry established around the port, it is possible to use this hydrogen for the production of low-emission products, and these products could even be exported through the port,” she notes.

Regarding the export of green products, Rosana Santos emphasizes that this process could highlight Brazil on the international stage, given the demand for such products and the quality of the country’s natural resources to enable their production.

For Eduardo Nery, Director-General of the National Agency for Waterway Transport (Antaq), the policy is the first step toward the necessary investments. “In the medium term, it will be possible to receive less polluting vessels and implement appropriate infrastructure to meet electricity demand”, Nery added.

What it is Green hydrogen, identified by the abbreviation H2V, is produced using clean and renewable energy sources. It is produced through the electrolysis of water, a chemical reaction triggered by an electric current. The production of green hydrogen does not emit carbon dioxide, and the element can be used for purposes ranging from electricity generation to ammonia production for fertilizers. According to Rosana Santos from Instituto E+ Transição Energética, H2V is one of the alternatives to fossil fuels and an important component for the decarbonization of various processes.

Port of Santos interested in clean energy production The Port of Santos is one of the Brazilian ports interested in producing H2V. According to Anderson Pomini, President of the Santos Port Authority (APS), the port is growing “with sustainability criteria in mind.”

He recalled that in November of last year, he met with Minister of Science and Technology Luciana Santos to seek support from the Ministry for the green hydrogen production project at the Port of Santos. The production is planned to come from the installation of an electrolyzer at the Itatinga Hydroelectric Plant in Bertioga.

With this production, APS would be able to produce, store, and distribute H2V to consumers, including port terminals, ships docked at the port, as well as local companies, industries, and residences.

According to Pomini, one of APS’s initiatives is the electrification of the dock, allowing docked ships to stop using fossil fuel at the port. “It is one of the main projects associated with the idea of a more sustainable port,” he says.

APS also stated that, through Ordinance Dipre No. 208, dated December 1, 2023, it reduced tariffs for “green ships” registered with and receiving positive scores in the Ship Environmental Index. According to the Port Authority, the discounts “also benefit ships that frequently navigate the Brazilian coast (cabotage) and passenger ships, as a way to promote tourism.”

Pecém The Pecém Port Complex in Ceará, where President Lula signed the Framework, is considered the center of H2V in Brazil. Covering 19,000 hectares, the port complex encompasses the major projects in the sector in the country.

André Magalhães, the port’s commercial director, explained how green hydrogen production will operate at the complex. According to him, the responsible companies will be located in the Ceará Export Processing Zone (ZPE), on an area of 1,900 hectares, to accommodate new investments.

Magalhães details that the Green Hydrogen hub at the Pecém Complex will offer shared solutions to producers through partners.

“This means that the producer does not need to invest in this equipment, thereby reducing their production costs”, he explains. According to the director, the first investment decisions are expected for the next year.