Sun and wind become an asset for the Northeast to export hydrogen – 03/23/2024 – Market

“There is a market for the whole world, and yet there will be a lack of green hydrogen. The demand is much greater than the supply.” It was with these words that André Magalhães, commercial director of the port of Pecém, in Ceará, defined the week of meetings with potential buyers of this product in Germany.

The executive says he spoke to almost 50 interested parties, in meetings in the cities of Berlin, Hamburg, Stuttgart and Essen, during a caravan organized by government bodies and German business entities. Among the participants were also representatives from Petrobras and Eletrobras.

The Germans showed all the advantages they can offer to those who guarantee the delivery of green hydrogen and green ammonia. The products get their name because they are made without any petroleum-based components, only renewable ones.

Magalhães made a point of taking numbers from international consultancies to ratify the advantage of the Brazilian Northeast.

One of them was the study carried out by the research company BloombergNEF, pointing out that the climatic conditions in this part of Brazil for the production of solar and wind energy are so far above the global average that they will help to lower the price of hydrogen manufactured in the region.

The speed and constancy of the winds, in addition to the quality of the sunlight, make energy generation more efficient in this part of the world.

The estimate is that the Northeast will be able to produce hydrogen at US$1.45 by 2030 and bring the price to US$0.55 by 2050. It would be the cheapest green hydrogen in the world.

The fuel is considered competitive with a price below US$3 per kilo, a price that is not currently practiced. A kilo of the product costs between US$7 and US$10.

In the European bloc’s first green hydrogen auction, launched at the end of last year by the European Commission, the ceiling price for delivery in five years was set at €4.50 per kilogram (US$4.91), but entrepreneurs also will receive subsidies for ten years, which increases the supplier’s final gain.

In Brazil, the extreme of the Northeast region has three green hydrogen projects for export in the first phase, but which are already trying to attract Brazilian and foreign industries.

The Pecém hydrogen hub has four pre-contracts. Fortescue, AES, Casa dos Ventos and FRV are companies that are already paying for the area and carrying out engineering studies. The water source is treated sewage water from Fortaleza. The goal is to start shipments in 2027. The gateway to Europe will be the port of Rotterdam, in the Netherlands.

In Piauí, production will be concentrated in the ZPE (Export Processing Zone) of Parnaíba, on the coast, with flow initially through the port of Luís Correia. Two companies have already announced their interest in installing, GEP (Green Energy Park), from Croatia, and Solatio, from Spain.

GEP, for example, plans to produce 10 GW (gigawatts) equivalent of green hydrogen and ammonia from water from the Parnaíba River. The products will be sent to the island of Krk, in Croatia, and will then be supplied to industries in southeastern Europe.

“Our investors are very qualified, committed and have support from the EU for this project in Brazil”, says Nathalia Ervedosa, director of commercial affairs in the European Union at Investe PI, who represented GPE in the investor caravan.

The project in Piauí even received a mention from the president of the European Commission, Ursula von der Leyen.

“Here in Hydrogen Week, new and exciting initiatives will see the light and be discussed. With Kazakhstan, Australia and Oman. And together with President Lula of Brazil, we announce the support of the European Union to build one of the largest hydrogen plants in the world, in the Brazilian state of Piauí, and is part of a 2 billion euro investment by Global Gateway in the hydrogen value chain in Brazil,” said Leyen when the investment was announced in November 2023.

There is another project to export hydrogen in the initial phase of implementation. It is in Grão Pará, in Maranhão. It already has the support of German companies, the railway operator DB (Deutsche Bahn) and the equipment manufacturer Siemens. The goal is to ship shipments through the Alcântara port terminal, supported by a logistics structure that includes railways.

The European Union has an ambitious target in relation to the green hydrogen chain. By 2030, it wants to set up a structure to produce 10 million tons of the fuel and its related materials, in addition to importing another 10 million tons. To give you an idea of ​​what this volume means, today local production is around 20 thousand tons.

Green hydrogen and ammonia will be used not only as raw materials for products such as biofertilizers, but mainly as a source of energy, allowing the continent to reduce the use of fossil sources such as coal and natural gas, and to have 100% green products. . It is an organized and strategic replacement, closely monitored by local governments.

The caravan of Brazilians, for example, was organized by AHK Rio (Brazil-Germany Chamber of Commerce and Industry) and GIZ (German Society for International Cooperation), but its scope is much broader.

It was part of H2Uppp (International Hydrogen Increase Program), one of the initiatives that make up the National Hydrogen Strategy, run by the Federal Ministry of Economic Affairs and Climate Action, but worked on in all areas of government.

Purposely, the visits were scheduled as a parallel activity to BETD24 (10th Berlin Energy Transition Dialogue), an event that transformed the country into a reference in debates on alternatives to fossil fuels. The meeting attracts representatives from energy companies and countries from around the world to the German capital.

The guiding thread of the discussions there signals where local economic interests are heading.

There was a lot of talk about how to accelerate the end of the use of coal and petroleum-based fuels, as well as the possibility of expanding the adoption of biomethane, SAF (sustainable aviation fuel) and green methanol for vessels. But by far the most discussed topic was green hydrogen and the challenges associated with its adoption.

Ethanol, for example, which is a product used on a large scale to fuel cars and produce electricity in Brazil, is seen in Europe as a carrier of green hydrogen. Fuel is imported only to remove molecules from it.

One of the main arguments adopted in defense of green hydrogen is of a social nature. Local government representatives say that European investments in emerging countries will boost the economy and create jobs.

“The alliances will allow us to share benefits”, said Bärbel Kofler, German Federal Government Commissioner for Human Rights Policy and Humanitarian Assistance, for whom projects in Brazil and Morocco serve as an example for the win-win policy that can be implemented from the expansion of hydrogen.

There is no consensus, however, whether there will actually be a fight against inequalities. Many fear that the export of green hydrogen and its products is a new alternative to preserve the model in which emerging countries provide raw materials for developed countries to remain at the forefront of generating new technologies and, now, manufacturing sustainable products. .

In its participation at BETD24, during the panel that brought together representatives from Latin America and the Caribbean, Brazil’s position was expressed by Rodrigo Rollemberg, Secretary of Green Economy, Decarbonization and Bioindustry at Mdic (Ministry of Development, Industry, Commerce and Services).

“We can provide green hydrogen, but we also need investments, a green seal recognized by Europeans and a market here for products from our industries”, said Rollemberg, who was applauded by the audience in a demonstration that commercial relations in this new market still need to be built.

The journalist traveled at the invitation of Instituto E+