Brazil’s potential to become a leading green hydrogen producer and exporter has been covered in the last fortnight by the Financial Times. With a domestic grid that is composed of around 90% renewables (largely through hydropower), the country has a head-start in the sector, comparable perhaps to Norway, and has in the north-east of the country “some of the most favourable wind conditions on the planet for generating electricity”.

A study by consultants McKinsey in late 2021 found the country to be one of the most competitive places in the world to produce H₂, with a forecast levelised cost estimated as being around US$1.5/kg in 2030. With this background, various companies are interested in tapping into the potential. Shell is jointly developing a pilot project, expected to begin operation in 2025, which is part of as much as US$30 billion in low-carbon hydrogen projects at some stage of implementation.

Export of H₂ and derivate products to Europe is expected as a first commercial push, though use in domestic agriculture is also foreseen (assumedly through green ammonia). Despite this, there are concerns that the potential may not be fully realised. The regulatory environment is not as conducive to the industry as it could be, while policy support such as subsidies, tax breaks, or state purchase agreements is not yet substantially in place, though the country is progressing a carbon permit market, which could be one support for the industry.