O market de H2V (green hydrogen) has expanded significantly in last years, gaining global prominence as a capabilities promising for the energy transition and reducing Taj emissions de carbon.
In Brazil, the potential protocols for development of this technology is significant, thanks to abundance de natural resources and increasing interest in fontes power sustainable.
O hydrogen green, generated from electrolysis da water to use power renewable, emerges as a capabilities strategic for decarbonize industries and energy sectors which are still highly dependent de fossil fuels.
In this context, the ABHIC (Brazilian Association of Hydrogen and Sustainable Fuels) celebrate, this month, your first year de expertise. O Canal Solar interviewed Sérgio Augusto Costa, President da ABHIC, to understand the process de creating da association and future perspectives of hydrogen.
Sergio is Founder e President da ABHIC, CEO of VILCO Energias Renováveis and Managing Director of EMD Brasil. Formed em Mechanical Engineering from UFSC, with specializations in M&A and Renewable Energy Regulation, has 20 years de experience No. electric sector.
A association is a national entity, with the mission de improve and deploy T and regulatory needed protocols for development do hydrogen and sustainable fuels in Brazil.
A ABHIC represents not only the companies de hydrogen green, like also as organizations who work with gray hydrogen, Brown e azul, that is, companies that utilize hydrogen produced from fuels fossils.
How did the idea of creating ABHIC come about and what were the main initial objectives of the association?
Brazil has gigantic potential when it comes to green hydrogen and its derivatives. The country has an investment potential of 200 billion dollars over the next 20 years, according to projections by consultancy McKinsey & Company, and could become one of the largest producers and exporters of this input.
However, we identified that, despite Brazil having many entities talking about this topic, the country lacked an association truly specialized in hydrogen and sustainable fuels.
In this way, ABHIC was created with the aim of contributing to the implementation and optimization of the market, technological and regulatory conditions necessary for the development of hydrogen and sustainable fuels in Brazil.
ABHIC works to contribute to the regulation and structuring of the national market and make Brazil one of the leaders in the supply of this commodity. From the moment the Brazilian market opens and develops, the country will have competitive advantages that place it ahead of other nations.
What is the role of ABHIC in the Brazilian energy scenario and how has the association contributed to the development of hydrogen as a source of clean energy in Brazil?
ABHIC's focus is on operating in the green hydrogen segment (generated through renewable sources) and other sustainable fuels. However, the entity also works with companies that use gray, brown and blue hydrogen, that is, companies that use hydrogen produced from fossil fuels, but that are committed to carrying out the energy transition to a sustainable economy through hydrogen. green.
In this way, ABHIC contributes to helping them adapt to the energy transition. This is the concept of energy transition.
The association works to promote the generation of green hydrogen and sustainable fuels with comprehensive action that involves public policies, investments, technological innovations and strategic partnerships.
Thus, ABHIC, within the scope of public policies, intends to assist with proposals for tax incentives for the entire chain of production, transport and storage of green hydrogen and sustainable fuels with the Executive Branch and the National Congress.
Furthermore, we understand that it is essential to invest in research and development to advance technologies related to the production, transport, storage and use of green hydrogen and sustainable fuels.
ABHIC is working with its to structure projects for submission to the public call for strategic themes of Finep Mais Inovação, related to green hydrogen technology and recently launched by the Government. It includes R$250 million in economic subsidies (non-refundable for companies) for low-carbon hydrogen.
ABHIC also works to foster strategic partnerships with the aim of boosting investments and sharing resources in projects.
Together with DWV (German Hydrogen and Fuel Cell Association), we are working on mapping possibilities for off-takers (buyers) for green hydrogen derivatives, such as ammonia and methanol, with the aim of directly connecting potential buyers in with companies and associates that wish to produce in Brazil, that is, the export market.
This partnership with DWV also aims to foster international cooperation to share best practices, technologies and resources in the transition to the hydrogen economy.
We also work to promote awareness campaigns to educate the public about the environmental and economic benefits of green hydrogen and sustainable fuels.
Finally, we will offer training and capacity building programs for professionals in the energy industry to drive expertise in these emerging sectors.
What were the biggest challenges faced by ABHIC in its first year of operation?
As this is still a new sector in Brazil, we went through many challenges in this first year. The main one, without a doubt, was the approval of the hydrogen legal framework, which happened recently, on August 2, after presidential sanction.
The definition of the law was awaited by all players related to the sector and will allow, from now on, companies and investors to have more legal certainty when making investments in the country.
However, there are other market challenges that need to be overcome, not only in Brazil, but around the world, such as reducing the production cost of green H2 from the current 5 USD/kg to 6 USD/kg to 1,5 USD/kg at USD 2 USD/kg, which is the cost of producing gray H2, that is, that extracted from natural gas, through the reforming of methane gas.
This is the most common H2 production process currently, and therefore is the benchmark, as it is understood that gray H2 technology is dominated and is unlikely to advance in the long term.
If a value of 3 USD/kg is reached for the production of green H2, for example, this difference of 1 USD/kg of H2, compared to gray H2, could be covered by a or revenue from environmental compensation such as a carbon credit.
In other words, there is still a lot to reduce the production cost, as well as improve the performance of electrolyzers in the production of green H2 for every 1 USD invested.
How did the association manage to overcome these challenges and what strategies were used?
ABHIC, with its board of directors and Board of Directors, together with associated companies and partner institutions, monitored and contributed to discussions regarding the legal framework for hydrogen through its relationship with the Executive and Legislative powers.
Furthermore, the association constantly contributes to sectoral discussions, studies, events and reports to spread its knowledge on the topic.
Can you highlight some important achievements of ABHIC in the last year?
In this first year of life, the entity had the opportunity to participate and contribute to important sectoral discussions, in different instances.
ABHIC representatives participated, for example, in meetings with Rodrigo Rollemberg, Secretary of Green Economy, Decarbonization and Bioindustry of the MDIC (Ministry of Development, Industry, Commerce and Services), and with representatives of the MME (Ministry of Mines and Energy) to deal with the future of green hydrogen in Brazil, as well as the public hearings of the Chamber of Deputies to deal with PL 2.308/2023, which is the basis of the Hydrogen Framework.
The association also met with representatives of the State Green Hydrogen Commission of Bahia to discuss the future of the energy transition in the State and the role of sustainable fuels, especially green hydrogen, during this process.
Furthermore, ABHIC participated in important national and international events, such as the Nordic Countries Delegation, in which I, as founder and president, participated in activities, including meetings, technical visits and events in different European countries, to evaluate and contribute to the business development between Brazil and .
I had the opportunity to participate in the Hydrogen Online Conference, the largest and most important virtual hydrogen event in the world.
Even in the first months of ABHIC's operations, the entity was able to count on the association of large companies, from different segments, which expresses the association's activities throughout the hydrogen chain.
Another fundamental point for ABHIC was the creation of a board of directors and a Board of Directors with experienced professionals who are a reference in the segments in which they operate.
What have been the main projects ed or initiated by ABHIC so far?
It was a first year of a lot of work. As the hydrogen sector is still a new segment, we have faced many challenges, but at the same time we are very optimistic about all of Brazil's potential to produce and sell green hydrogen and its derivatives.
In this first year, as I mentioned in the previous answer, in addition to participating in discussions related to the Hydrogen Legal Framework, ABHIC participated and ed numerous national and international events to contribute to assessments on green hydrogen and its derivatives, such as ammonia, methanol and sustainable aircraft fuel – SAF.
During the period, the association also participated in meetings with authorities from the Federal and State governments and contributed to reports in the Brazilian and international press.
How does the association plan to increase the adoption of hydrogen in different sectors such as transport, industry and power generation?
Due to the intensive capital requirement for implementing a Hydrogen project, we understand that it is first necessary to focus on exporting the hydrogen commodity.
In fact, due to the high pressures required and the high risk involved as it is a highly explosive chemical element, hydrogen derivatives, such as ammonia, e-methanol, e-diesel, e-jet (the “Sustainable Aviation Fuels – SAF”) and e-nafta the products to be exported.
Just informing that the “e” comes from “electro”, that is, they are “e-fuels”, which are synthesized through chemical processes using captured CO2 (Carbon Dioxide) or CO (Carbon Monoxide), together with hydrogen obtained from the water electrolysis process with electricity produced by renewable sources (hydroelectric, wind, solar, biomass, geothermal, etc.).
In the process of producing hydrogen through electrolysis, the waste is oxygen. In other words, in the hydrogen industry, instead of having greenhouse gases (Carbon Dioxide – CO2, Methane – CH4, Nitrous Oxide – N2O), sulfur hexafluoride – SF6, hydrofluorocarbon – HFC and Perfluorocarbon – PFC, it is obtained the primordial element for human breathing.
NH3 (ammonia), in particular, is produced from the separation of nitrogen from air, which is composed of 21% oxygen, 78% nitrogen, 1% argon, and 0,03% carbon dioxide. Thus, by mixing nitrogen with hydrogen, it is synthesized to obtain ammonia.
Therefore, with exports, an entire port and gas pipeline infrastructure is developed, for example, in addition to know-how and expertise to, in parallel, begin to develop the domestic market. We see the fertilizer industry as one of the major possible vectors for accelerating the domestic market.
Hydrogen produced in local plants, close to industrial fertilizer manufacturing plants, could reduce the cost of the input Ammonia (NH3) and, therefore, with the possibility of reducing the production cost of the agricultural crop in question (such as soybeans, corn, rice and beans), allowing greater control of food inflation, for example, and also increasing the competitiveness of our agricultural products for export. According to data from ANDA (National Association for the Diffusion of Fertilizers), in 2022 Brazil imported around 86% of the fertilizers used in Agriculture.
Another important sector for developing the local market is transport, specifically urban buses and trucks, all of which are major emitters of Carbon Dioxide and Monoxide.
Currently, there are a large number of national and international companies with green hydrogen and derivatives projects (ammonia, e-methanol, sustainable aviation fuel – SAF, etc.) underway in Brazil or with the intention of developing projects in the country. underway on a commercial scale, in addition to pilot projects. In other words, even while there was no defined regulation, we have already noticed a great interest in the development of green hydrogen projects and derivatives in Brazil.
It is worth highlighting that some of our associates are already developing projects in the order of GWs, producing green ammonia and e-methanol, including carbon capture projects.
However, they are still in the feasibility study phase.
Some of these projects will be for exclusive export, and others will serve the local market and export, thus having a mix. The start-up horizon for the first projects is from 2028.
What are the strategies to attract more investment and financing for the development of hydrogen in Brazil?
Brazil has gigantic potential when it comes to green hydrogen. The country could become one of the largest exporters of hydrogen in the world, especially to , which has already announced that it will import up to 70% of hydrogen to meet its domestic demand. This is an incredible opportunity to transform Brazil into one of the largest export partners of hydrogen derivatives for .
If we talk about investments, Brazil's potential is 200 billion dollars invested over the next 20 years, according to projections from consultancy McKinsey & Company.
Furthermore, according to the Hydrogen Council, the time is for expansion: more than 1.000 project proposals have been announced around the world.
Globally, the industry has announced more than 1.000 large-scale project proposals by the end of January 2023. Of these, 795 projects aim to be fully or partially commissioned by 2030 and represent US$320 billion of investments in hydrogen value chains by 2030 .
Europe continues to be the world leader in hydrogen project proposals, with the largest investments ($117 billion, 35% of investments) and highest absolute growth ($40 billion). Latin America and North America follow Europe, each representing around 15% of announced investments.
In this context, Brazil is experiencing a unique moment. This is a great opportunity to contribute to the country becoming one of the leaders in the production of Ouro Verde, as green hydrogen is also known abroad.
In addition to water, one of the main inputs in hydrogen production is electrical energy. According to consultancy McKinsey & Company, in the study “Green hydrogen: an opportunity to generate wealth with sustainability, for Brazil and the world”, Brazil is among the most competitive countries for the production of green hydrogen in the world.
The Brazilian Green Levelized Cost of Hydrogen would be around approximately USD 1,50 / kg of H2 in 2030, comparable to the best locations in the USA, Australia, Spain and Saudi Arabia. It is important to that we currently have a total installed generation capacity of 193 GW, being the 7th country in the world in installed capacity, and the 3rd largest producer of renewable energy, second only to the USA and China. Compared to these two countries, Brazil has a higher proportion of renewable energy, around 85%.
recently launched its National Hydrogen Strategic Plan 2.0, in which the target for domestic green hydrogen production capacity by 2030 was doubled, from 5 GW to 10 GW. Furthermore, itself has already announced that it will import up to 70% of hydrogen to meet its internal demand.
In other words, this is an incredible opportunity to transform Brazil into one of the largest export partners for hydrogen derivatives to . With the definition of the Legal Framework for hydrogen in Brazil, Brazil is able to provide legal security for carrying out these investments in the country.
What are the main technological challenges that still need to be overcome to make hydrogen competitive in of cost and efficiency?
At the moment, among many, there are basically three competing technologies in the production of green H2 to consolidate itself as the most viable: alkaline electrolyzers, PEM (Proton Exchange Membrane) electrolyzers and SOFC (Solid Oxide Electrolyzer Cell) electrolyzers.
Electrolysis with alkaline water electrodes has a type of electrolyzer that carries out the water electrolysis process using an alkaline solution, generally a solution of KOH (potassium hydroxide) or NaOH (sodium hydroxide), as the electrolyte. In this process, water is divided into its basic components, H2 (Hydrogen) and O2 (Oxygen), through the age of an electric current.
Pressurized alkaline water electrolysis is a variant of conventional alkaline water electrolysis, in which the process occurs under pressure. In this method, an alkaline solution, usually KOH (Potassium Hydroxide) or NaOH (Sodium Hydroxide), is electrolyzed to produce H2 and O2 from H2O, with the help of an electric current.
Finally, electrolysis with proton exchange membrane electrodes is a crucial technology in the area of fuel cells and electrolyzers. It is called this because it uses a special membrane that allows the selective exchange of protons (hydrogen ions) while blocking the flow of electrons.
This membrane is an essential component in devices that involve electrochemical reactions, where transfers of protons and electrons occur.
Solid oxide electrolysis is a technology that involves using solid oxides as electrolytes to carry out the process of electrolysis of water or other compounds to produce hydrogen or other gases. In this methodology, a solid electrolyte, usually a ceramic oxide, is used to separate the gases generated during electrolysis.
Solid oxide electrolysis is the inverse of the operation of Solid Oxide Fuel Cells (“Solid Oxide Fuel Cells” – SOFC), where electricity is generated through the reaction of a fuel, such as hydrogen, with an Oxidant, such as Oxygen. of the Air.
I reinforce that it is a new technology, a new industry, therefore it needs financial and fiscal incentives (tax) to develop (reduction in CAPEX and OPEX and increase in performance).
How is ABHIC promoting research and development of new hydrogen technologies?
We understand that it is essential to invest in research and development to advance technologies related to the production, transport, storage and use of green hydrogen and sustainable fuels.
Because of this, ABHIC is working with its to structure projects for submission to the public call for strategic themes of Finep Mais Inovação, related to green hydrogen technology and recently launched by the Government. It includes R$250 million in economic subsidies (non-refundable for companies) for low-carbon hydrogen.
We also defend access to low-interest financing, as this is essential to research and development projects in the area.
In addition, the association promoted, in partnership with Sapiens Parque and Fotovoltaica/UFSC (Photovoltaic Solar Energy Laboratory of the Federal University of Santa Catarina), in May of this year, a workshop to seek partnerships for the project “hydrogen in the context of the Brazilian electricity sector”, authored by ANEEL (National Electric Energy Agency), referring to call number 023/2024.
The initiative dealt with the registration of projects ed by the PDI (Research, Development and Innovation Program) developed by the Agency, which include the insertion of renewable hydrogen production systems in an integrated and sustainable way.
How is ABHIC ensuring that hydrogen development is environmentally sustainable? And what are the main environmental concerns related to the hydrogen life cycle and how is the association addressing these issues?
As previously highlighted, ABHIC represents not only Green Hydrogen companies, but also organizations that work with Gray, Brown and Blue hydrogen, that is, companies that use hydrogen produced from fossil fuels, but which are committed to carrying out the energy transition to a sustainable economy through green hydrogen.
In other words, they are companies that use hydrogen produced from fossil fuels, but that are committed to carrying out the energy transition to a sustainable economy through green hydrogen. For ABHIC, this is the concept of Energy transition.
Furthermore, ABHIC's operating sector is an environmentally sustainable segment. Green hydrogen, as well as its derivatives (ammonia, methanol, sustainable aviation fuel – SAF, etc.), are clean and renewable fuels, which play an essential role in the energy transition.
What are ABHIC's expectations for the future of hydrogen in Brazil?
Brazil has enormous potential when it comes to green hydrogen, which generates great optimism in the market.
The country already has a renewable energy generation matrix, with more than 85% of installed capacity in renewable sources. In addition to having an interconnected electrical system across practically the entire country, with more than 170 thousand km of transmission lines.
This allows us to use the natural resources of each region to generate renewable energy, such as Wind and Solar in the Northeast, and Hydroelectric in the South, Southeast, Central-West and North, for example. It's a competitive advantage.
So, unlike the United States and Europe, we are already renewable, while these countries, in addition to promoting the production of Green H2, also need to make renewable generation viable.
And finally, according to the World Bank, Brazil has the largest freshwater reserves in the world (13,2%), followed by Russia (10%), Canada (6,6%), USA (6,5%) and China (6,5%). Therefore, there is no need for additional desalination costs for the production of hydrogen and derivatives.
Taking into all these factors, and the projections already mentioned (such as the McKinsey & Company consultancy study, which points to a potential of 200 billion dollars invested over the next 20 years in Brazil), expectations are very optimistic regarding the future of hydrogen in Brazil. Country.
What is the final message you would like to leave our readers about ABHIC’s first year and the association’s next steps?
ABHIC's first year of operation was very intense, and at the same time very positive. During this period, the association brought together a very strong istration, with renowned professionals from different players who worked in the green hydrogen chain.
In addition to participating in discussions related to the Hydrogen Legal Framework, ABHIC participated and ed numerous national and international events to contribute to assessments on green hydrogen and its derivatives, such as ammonia, methanol and sustainable aircraft fuel – SAF.
During the period, the association also participated in meetings with authorities from the Federal and State governments and contributed to reports in the Brazilian and international press.
Another characteristic of ABHIC is to have among its national and international companies that operate throughout the hydrogen and its derivatives chain (suppliers of goods and services, producers, transporters and buyers of Hydrogen and Hydrogen Derivatives), especially in the energy, transport and , petroleum, mining, steel and chemicals.
Currently, the association includes Copel, which operates in the generation, transmission, distribution and sale of electrical energy, Celeo, an international investor that actively participates in the development, investment and management of infrastructure assets (energy transmission and renewable generation), and the construction company Elecnor do Brasil, which is part of the Elecnor Group, with Spanish capital, and operates in the construction of EPC projects for substations, transmission lines, gas projects and centralized generation of photovoltaic and wind energy.
They are also associated with Vilco, which operates in the renewable energy market through specialized services in business, projects and consultancy in the electrical sector, Wärtsilä Brasil, a Finnish company that operates in the development of technologies for the use of hydrogen in the generation of thermoelectric energy, and Horse Cars, a company created in 2023, based in London, from the t venture between the Renault Group, Geely Holding and Aramco, focusing on the development, production and supply of internal combustion engines and low-emission hybrids and alternative fuel for the automotive and industrial sectors.
The entity is also a partner of DWV (German Hydrogen and Fuel Cell Association), which has worked for a sustainable hydrogen industry since 1996 in , the largest hydrogen consumer market in the world, of Mission Hydrogen, an initiative that operates in sharing knowledge about hydrogen and ing companies, and RENAC (Renewables Academy), one of the main international providers of training and capacity building in renewable energy and energy efficiency.
It was a first year of hard work from the entire ABHIC team, including the board and Board of Directors, together with our associates and partners, but this is just the beginning. The sector is still structuring itself to reach full development in a few years. We are very optimistic about the future of renewable and low-carbon hydrogen in Brazil, which will certainly be a global power in this regard.
As for the next steps, we remain focused on ABHIC's mission, which is to contribute to the promotion and development of the hydrogen and derivatives market in Brazil, especially after the approval of the hydrogen regulatory framework, which will bring more security to making investments in this sector.
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