The Green Hydrogen revolution

13:43 06 de December de 2022 Por Daniel Oiticica

Ceará will become the first producer of Green Hydrogen in Brazil, with the launching of a hub, located in the Industrial and Port Complex of Pecém (CIPP). More than 20 Memoranda of Understanding with global energy giants have already been signed (24 Memoranda by November 2022) for their installation at the hub. Soon, Energia Pecém, from the Portuguese group EDP, which already operates with thermoelectric energy in CIPP, will launch its Green Hydrogen plant.

Hydrogen as a fuel is one of the solutions for the future of a carbon-neutral world. As the most abundant element in the universe, hydrogen can be transformed into an energy source through thermal processes by reacting with hydrocarbon-type fuels. But this type of generation produces carbon emissions, which does not solve the problem.

The so-called green hydrogen (h2v) or renewable hydrogen is 100% sustainable. It is produced from renewable energies, such as solar and wind, through a process called electrolysis. Electrolysis uses an electric current to split water into hydrogen and oxygen in a device called an electrolyzer. This type of fuel can offer an environmentally friendly solution to some of the most polluting industries, including transport, chemicals, steel and power generation.

The potential of this type of generation is enormous. Currently, 99% of the hydrogen used as fuel is produced from non-renewable sources. And less than 0.1% is only produced through water electrolysis, according to the International Energy Agency.

This process is moving forward. The latest July 2021 report from the Hydrogen Council, a global initiative led by CEOs of 132 leading energy, transport, industry and investment companies with a united, long-term vision to develop the hydrogen economy, recorded the existence of 359 large hydrogen projects in progress in the world, estimating that these announced investments are in the order of US$ 500 billion. The State of Ceará already appears on the map.

Ceará aims to become a Hub for the production and export of green hydrogen, generating new and sustainable business opportunities for companies worldwide. The state will become a global player in the h2v production chain, contribute to the reduction of global CO2 levels and promote its social, economic, technological and environmental development. For this, it plans to build the "largest green hydrogen hub in Brazil" in the Pecém Port Complex, in São Gonçalo do Amarante, 60km from Fortaleza.

Ceará established the first legislation for green hydrogen projects in the country with a series of sustainable guarantees, such as the removal of the forecast for the installation of hydrogen production units inside protected areas such as dune fields, mangroves, Atlantic Forest biome, conservation unit buffer zone and areas with migratory birds.

The Governance of the Ceará Green Hydrogen Hub, established by decree, is carried out by a multidisciplinary working group, made up of representatives of the Government of Ceará, the Federation of Industries of Ceará (FIEC), the Federal University of Ceará (UFC) and the Pecém Industrial and Port Complex (CIPP).

The kickoff is from EDP
The first Green Hydrogen plant in Latin America should be inaugurated in December 2022. Result of the Research & Development work of the thermoelectric plant Energia Pecém, of the Portuguese group EDP, it counts on an initial investment of 42 million Reals (about 8 million dollars). It will have the capacity to produce up to 178 tons of green hydrogen per year. This plant will serve as a model for the hub project in several aspects, from scalability, to partnerships focused on generation, storage, and mobility, among others. All of this favors the use of clean energy sources.

The idea is to replace mineral coal in the Pecém Energy Plant (720 MW). The installation will be in an available area next to the thermoelectric plant and fed by a 3 MW photovoltaic plant for a 1.25 MW electrolysis capacity unit.

How will this energy be supplied?
There are basically three sources of energy for the production of green hydrogen, whose generation in Ceará has been increasing every year: solar and wind, in addition to hydroelectric.

The quantity of water necessary for the electrolysis process is also another aspect to be taken into consideration. If all the 20 projects foreseen for the Green Hydrogen Hub come to fruition, the official forecast is that the demand for water for electrolysis is about 2.14m³/s in 2034. To supply this demand, a project of the Utilitas Pecém company is already underway that will use the water availability of 3,7 m³/s of wastewater to transform it into reusable water for the Port of Pecém Complex. It will be up to 1.5m³/s of water from the sewage system of the Metropolitan Region of Fortaleza into reusable water, which can be used to produce Green Hydrogen.

The green hydrogen value chain will encompass renewable energy production, the production, storage, distribution and consumption of hydrogen, green fertilizers and basic petrochemicals, including synthetic fuels. In addition to the investments in the Hydrogen Hub, this development brings with it a series of investment opportunities in related sectors of its production chain.

According to Constantino Frate, coordinator of Attraction of Structural Industrial Enterprises at Sedet, we are talking about basic petrochemicals, production of gasoline, diesel, aviation fuel, fertilizers, paints, plastics, solvents, equipment such as fill cells, which are the devices that will be coupled to the engine to transform hydrogen into electric current and drive the electric motor, for example.

Besides hydrogen supply systems, pumps, dispensers, compressors, batteries, service
companies, engineering companies, construction and assembly companies, maintenance
companies, and consulting companies. There is also the opportunity to create a new industry
in Ceará, that of shipyards specialized in manufacturing structures for offshore wind power
generation.

Why Ceará?
The State has a series of favorable conditions for the development of the green hydrogen hub in its territory.

1. In 2021, Ceará joined campaigns and agreements in the search for a cleaner, safer and more sustainable world.
2. Great potential for wind and solar energy generation, used in the green hydrogen production process.
3. Geographical location as the closest point in Brazil to Europe.
4. Wide connectivity with the European continent, thanks to the partnership of the Port of Pecém with the Port of Rotterdam, Europe's largest H2V centre. Since 2018, the Port of Pecém is managed by the State Government of Ceará and the Port of Rotterdam, a company that manages the Port of Rotterdam in the Netherlands.
5. Excellent air connectivity with weekly flights to Europe.
6. Electricity grid suitable for electrolysers.
7. Natural gas network from the port to the industrial zone.
8. Options to customize water availability.
9. Shared tanking.
10. Area greater than 1000 ha available for h2v production.
11. Synergy with the industries installed for the green hydrogen market.

Benefits for businesses

As it is located in an Export Processing Zone (ZPE), the hub area offers all companies a special tax, exchange and administrative treatment, provided for by law.

By October 2022 the State of Ceará had already signed 24 Memoranda of Understanding with large companies. They intend to invest in the implementation of industrial plants for the production of green hydrogen in the Pecém complex.

Global green energy company, Fortescue Future Industries (FFI), based in Australia is also interested in participating in the Hub and has already signed a Memorandum of Understanding with Ceará. "We want to install the first renewable hydrogen plant in Brazil, to establish a new and important energy market, which will be essential for the environment," explains FFI's Business Development Manager in Brazil, Luis Viga.

"Ceará actively promotes the development of green hydrogen projects. The local government has done a great job aligning public goals with private interests to support the development of these types of projects. Likewise, Ceará has a competitive and large-scale potential for wind and solar projects, essential for the development of the green hydrogen industry. In addition to this, it has a world-class port infrastructure in Pecém and several fiscal advantages, such as the ZPE and Sudene, for example", says Luis Viga.

Considering only the agreements signed so far, the Green Hydrogen Hub of Ceará should receive a private investment of around 40 billion dollars in the construction of infrastructure for green hydrogen production in the next years. If all investments materialize, it is estimated that the production of green hydrogen in the Hub will generate a demand of up to 49 GW of renewable energy.

What is green hydrogen?
Considered a universal fuel, hydrogen, in its "green" version, can be obtained by using renewable energy, such as wind energy and solar/photovoltaic energy - abundant sources in Ceará, in the process of separating the hydrogen molecule. H2 from the oxygen molecule in water. This technology is based on the generation of hydrogen – a universal, light and very reactive fuel – through a chemical process known as electrolysis. In the use of hydrogen as a fuel, replacing the use of non-renewable sources, it is possible to cancel the emission of carbon dioxide (CO2) in the atmosphere, something considered a priority by European countries that seek sustainable progress. In this way, the requirements of the Paris Agreement are also met, which provides for a reduction in the emission of polluting gases into the environment by the participating nations.

What are the main consumer markets today?
In addition to the export potential to the Port of Rotterdam, destined for European countries, there are also opportunities for moving this energy source/vector to countries such as China, Japan and South Korea, which have also defined their decarbonization plans for their energy matrix, with plans to import Green Hydrogen.

What is Ceará's potential for this type of business?
Ceará has great potential for the generation of renewable energy, which is essential to enable the development of a Green Hydrogen market. Taking into account the installed capacity and the already calculated potential of new installations of renewable sources (wind or photovoltaic), in addition to the great treasure of the State, which is the combination of solar and wind sources, in a hybrid process, there is a very favorable environment for this type of business.

Why is the Pecém Complex the ideal location for a green hydrogen hub?
Factors such as a port infrastructure with new berths in an area of future port expansion, with adequate operational capacity and draft for H2V operations, a robust electrical network with transmission line infrastructure compatible with the demands of electrolysis plants, a wide gas distribution network that connects the entire Complex, from the Port Terminal (pier 2) to the industrial areas, which can be used to transport H2V between industrial production and consumption areas and an ecosystem that is totally favorable for the development of this aforementioned chain. In addition, the Pecém Complex has, in its wide industrial area, the only Export Processing Zone (Link para matéria sobre ZPE) in operation in Brazil, the Ceará ZPE, being a powerful competitive differential for export-oriented businesses, in view of the tax incentives that the ZPE of Ceará offers.

What does the world think of green hydrogen?
The external scenario is favorable, as hydrogen is no longer seen as a simple fuel, but as “the solution” for the decarbonization of the world economy, also called energy transformation. Green hydrogen as a fuel is already a reality in countries like the United States, Russia, China, France and Germany, being a sustainable alternative to reduce CO2 emissions and take care of the planet.

Is green hydrogen a fuel that could change the way the world deals with CO2 emissions?
Green hydrogen has the potential to revolutionize today's energy system towards a cleaner, safer and more sustainable path due to its versatile characteristics, from production to use. The energy transformation proposed worldwide must use H2 as a substitute fuel for its fossil fuel equivalents and may indeed present a viable solution to achieve a low carbon society.

Multimedia

Radio: Renato Martins, director of ABB Brazil

Live: Rebeca Oliveira, director of Institutional Relations at the Port of Pecém, and Cibele Gaspar, master in Administration and Strategic Management and director of Nexxi Assessoria Financeira

Podcast: Constantino Frate, Investment Attraction Coordinator of the Green Hydrogen Production Chain from Sedet