Exploiting Brazil's potential as a renewable hydrogen hub

There is no doubt that Brazil’s economy has great potential. The country has a long tradition of industry and vast renewable energy resources. Brazil could thus become a hub for the production of low emissions hydrogen and related molecules to help meet global climate targets.

The new study by think tanks Instituto E+ Transição Energética, Agora Industry and Agora Energiewende considered what it will take to make that vision a reality in Brazil. It concluded that – like in other regions - hydrogen is best suited for decarbonising those applications that cannot directly use either renewable electricity or biomethane from residual biomass. Such “no-regret” applications include certain industrial processes, and shipping and aviation. While fossil-based H2 produced with carbon capture and storage may be a bridging technology given the country’s energy resources, it won’t be able to compete with renewable hydrogen in the long run.

“Brazil boasts ample renewable energy sources, vital raw materials, skilled workers and a mature bioenergy industry,” said Frank Peter, director of Agora Industry. “This puts the country in a good position to become a key player in the development of net-zero industries and the creation of a global market for renewable hydrogen and its derivatives.”

To exploit its renewable hydrogen potential effectively, Brazil must ensure it has the necessary infrastructure to integrate H₂ production into its energy development plans. These plans also need to consider social and environmental impacts when designing hydrogen and power-to-X projects, while taking into account regional differences across Brazil’s vast territory, the study’s authors argue.

Low-emission H₂ offers domestic producers a further option to decarbonise production processes in sectors such as fertilisers, steelmaking and chemicals, but Brazil can also play a key role in the global trade of PtX products, exporting hydrogen derivatives to markets in Europe and Asia-Pacific, the report finds.

The study’s authors noted that if Brazil wants to establish itself as an international hydrogen hub it is essential that the country sets standards for low-emissions H₂ that are in line with global trade requirements. A focus on the climate benefits of renewable hydrogen, alongside its economic and energy potential, can help Brazil tap into additional sources of financing and cross-border opportunities for research, development and investment.

“With its presidency of the G20 and as host of the UN climate conference in 2025 the country can spearhead the development of strategic partnerships between the global South and North that can result in win-win situations for both sides,” said Frank Peter. “By putting in place good governance structures for renewable hydrogen, Brazil can lead by example and secure external investments for its H₂ economy.”

In sum, the study finds that Brazil is well-positioned to produce renewable hydrogen and PtX products due to its abundant and cost-competitive renewable energy resources, natural resources and industrial expertise. But to best develop domestic business models and provide a sustainable export commodity requires a focus on no-regret applications and the country’s unique regional capacities.

"We hope that low-emissions hydrogen can serve as the basis for Brazil's green neo-industrialization, fostering our socio-economic development and enabling the country to make a significant contribution to the global energy transition," said the executive director of Instituto E+, Rosana Santos. 

The study is part of a series of reports on the role hydrogen can play in the energy transition around the world. Last year, Agora published ’12 insights on hydrogen – Argentina edition.” A study looking into the potential for hydrogen in Southeast Asia is due to be published in the coming weeks.

The report “12 Insights on Hydrogen – Brazil Edition” can be downloaded below.