Brazil’s national development bank (BNDES) is preparing to launch Brazil’s largest low-carbon hydrogen production project , with an initial investment of between $2 billion and $3 billion (R$11 billion to R$16 billion). The first phase of the project, expected to be announced in 2024, could be the starting point for an even more ambitious project, with the potential to reach $7 billion (R$38.5 billion) in investments over future stages . The final investment decision is expected to be made by mid-2025, according to Luciana Costa, BNDES’s infrastructure director.
Renewable Energy and Brazil's Strategic Role in Low-Carbon Hydrogen
Brazil’s competitiveness in the global hydrogen scenario is reinforced by its clean energy matrix. With over 80% of its electricity generated by renewable sources, the country’s energy costs are around 50% lower than the average for large OECD economies. This advantage is crucial, as renewable energy accounts for 70% of the production cost of low-emission hydrogen .
This promising substitute for fossil fuels is seen as a key solution to decarbonize industrial and transportation sectors, consolidating Brazil as a strategic player in the global sustainable energy market . The BNDES project can position the country at the forefront of this energy transition, with a significant impact on the domestic and international markets.
Beyond Hydrogen: Biomethane and Sustainable Infrastructure
Low-emission hydrogen is not the only focus of BNDES. The institution is also investing in the biomethane sector, a fuel gas derived from the decomposition of organic materials such as sugarcane bagasse and food waste . Brazil is expected to become the world's fifth largest producer of biomethane, reinforcing its role in the low-carbon economy.
Additionally, BNDES has been using innovative financing models, such as non-recourse project finance , to support large infrastructure projects. It recently approved a R$1.3 billion operation under this model for a highway, complementing other investments in projects such as the Dutra and Rio-Santos highways.
With these initiatives, BNDES reaffirms its position as a catalyst for a sustainable economy and a cleaner energy future , highlighting Brazil as a global leader in environmental innovation and economic efficiency.
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