Hydrogen Intelligence - H2lligence’s Post

Global Energy Monitor published a report on Brazil Green Steel August 2024 Key points High-quality iron ore reserves, abundant renewable electricity, and a skilled workforce make Brazil a prime candidate to lead Latin America’s green steel transition. Brazil’s well-developed and rapidly growing renewable energy sector will be instrumental in the large-scale green hydrogen production required to ramp up steelmaking via the low-emissions hydrogen-direct reduced iron (DRI) route. Brazil ranks among the world’s top ten nations in operating hydropower, bioenergy, and utility-scale wind and solar capacity, as well as within the top three for prospective utility-scale solar and wind capacity. Despite efforts to partially decarbonize the Brazilian steel industry through the use of biochar in blast furnaces (BFs) and scrap in electric arc furnaces (EAFs), two-thirds of Brazil’s operating steel capacity continues to rely on emissions-intensive, coal-based blast furnace-basic oxygen furnace (BF-BOF) technology.  Lower-emissions EAF and DRI technology are less prevalent in Brazil than in most other large steelmaking countries. EAFs account for less than one-quarter of Brazil’s steelmaking capacity, and DRI capacity is limited to a single plant not currently operating. More than half of the coal-based BFs at Brazil’s largest steel plants are relatively new or recently relined and are thus capable of operating well into the 2030s without significant interventions to switch technologies. Advance company planning, government policy, financial incentives, and international cooperation will be crucial in supporting green alternatives. Brazil is well-positioned to become a global green iron and steel leader, thanks to its established industrial infrastructure, high quality iron ore reserves, a skilled workforce with steelmaking expertise, and unparalleled renewable energy resources. Moreover, a July 2024 report from Global Efficiency Intelligence estimates that Brazil has the capacity to produce green steel at a lower price than other leading steelmaking nations. The key to seeing this possibility become a reality is strategic policy setting and sectoral alignment with the country’s net zero targets. Hosting COP30 in 2025 could be the tipping point that propels Brazil into a future as the leader on green steel. Brazil’s steel industry currently relies heavily on emissions-intensive blast-furnace-basic oxygen furnace technology, with 76% of operating steel capacity using BF-BOF and just 24% using the lower-emissions electric arc furnace alternative. The World Economic Forum estimates that emissions from Brazil’s steel industry could rise nearly a third by 2050 without proactive moves to boost demand and supply of green iron and steel. However, the country could take advantage of its many strengths to embark on a low-emissions overhaul.  Osama Fawzy Georgy HENEIN, MBA

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