Brazil’s green hydrogen sector draws foreign capital as projects move toward commercial phase

European funding expands the project pipeline

Brazil’s green hydrogen sector is moving beyond its initial promotional phase as foreign funding supports projects covering production, industrial consumption and export infrastructure. Valor Econômico reported that the European Union announced a €3 million investment in June for nine Brazilian projects through H2Uppp, a program implemented by the German development agency GIZ.

The nine projects will join eight other initiatives already supported by H2Uppp in Brazil. Isabela Santos, coordinator of H2Uppp Brasil, said the program connects developers with European private-sector participants and provides technical assistance. The supported businesses span the hydrogen value chain, including e-methanol, sustainable aviation fuel and projects intended to reduce emissions from the automotive industry.

Production could exceed projected domestic demand

The nine new projects are expected to be disclosed during European Hydrogen Week in Brussels, Belgium, in October. According to Valor Econômico, the portfolio includes green corridors between Brazilian and European ports designed to facilitate exports of green hydrogen, ammonia and green steel. These initiatives could connect Brazil’s renewable-energy resources with European demand for fuels and industrial materials produced with lower emissions.

A study by the Brazilian Hydrogen Association, known as ABH2, identified 34 projects under development in Brazil. Together, they have projected annual capacity of up to 4.6 million tonnes of low-emission hydrogen from 2035, compared with expected annual demand of about 3.7 million tonnes in the same period. Five of the mapped initiatives, including projects involving CSN and Petrobras, receive support from Brazil’s Ministry of Mines and Energy and focus on domestic production and consumption.

Ammonia and green steel broaden the market

ABH2 found that 95% of the projects also plan to produce ammonia from green hydrogen. The output could be exported for maritime use or consumed by Brazil’s fertilizer industry, which faces strong domestic demand and has experienced sharply higher prices since the conflict between Russia and Ukraine. Hydrogen could also support the direct reduction of iron ore. Vale and Green Energy Park are already working on this route, which could raise the value of Brazilian exports and help steelmakers compete in Europe under stricter carbon-related taxation.

Cost and offtake remain the decisive constraints. Water electrolysis, the principal production method, costs between R$10 and R$70 per kilogram, according to the experts cited by Valor Econômico. Hydrogen derived from biomass costs between R$7 and R$20 per kilogram. One H2Uppp-supported project uses waste from pig production around Toledo, Paraná, as feedstock for sustainable aviation fuel, while reducing the risk of phosphate contamination in soil and groundwater. Santos said the central challenge is securing buyers inside and outside Brazil, allowing producers to scale output and reduce the cost of hydrogen and synthetic fuels. The project pipeline is advancing, but commercial contracts will determine how much planned capacity is ultimately built.