Boosting E-Fuel Trade: Hydrogen Import Coalition's Solution

With its advantageous geography and abundant renewable resources, Brazil holds immense potential to become a global green hydrogen production hub. The Hydrogen Import Coalition, a consortium of leading European energy players (DEME, ENGIE, Exmar, Fluxys, Port of Antwerp-Bruges, and WaterstofNet), partnered with ENGIE Impact to identify the overview of a hydrogen export project in Brazil.

Challenge

The Coalition, leveraging its collective industry expertise, aims to import renewable energy in the form of hydrogen carriers. These imports are crucial for achieving the EU and Belgium's carbon neutrality targets by 2050. Their previous study focused on cost implications and import methods from various countries. However, key challenges remained:

• Selecting Competitive Production Locations: Identifying the optimal location in Brazil with the best combination of cost, resource availability, and strategic fit for these European players.
• Choosing the Most Suitable Hydrogen Carrier: Evaluating different carriers based on the overall cost of conversion, handling infrastructure, and logistic costs.
• Scaling Up Strategy: Develop a roadmap to transition from pilot projects to a large-scale hydrogen export portfolio, analyzing financial implications and sensibilize key inputs like carbon cost.

Solution

To address these challenges, ENGIE Impact developed a comprehensive, top-down optimization analysis across the entire hydrogen value chain, following a four-step approach:

1. Shared Vision and Criteria: Defined a set of shared criteria for all coalition members to assess the strategic and techno-economic fit of potential ports and carriers.
2. Identifying Optimal Sites: Ranking the best possible locations for the Coalition’s needs based on access to renewable resources for green hydrogen production.
3. Designing the Export Value Chain: Optimizing equipment sizing and infrastructure based on the chosen carrier, while minimizing the Levelized Cost of Hydrogen (LCOH) from cradle-to-gate.
4. Roadmap Development: Creating a roadmap for transitioning from pilot projects to full-scale commercial operations, considering the potential effect of relevant external factors.

Results

The coalition gained a deep understanding of the economic viability and ports’ readiness to operate the production of various hydrogen carriers through a comprehensive analysis that considered both local factors and technical considerations. This analysis provided long-term visibility on how current decisions would impact future scenarios, ensuring strategic alignment and mitigating potential risks associated with different pathways. Furthermore, the project resulted in the development of a robust strategy for scaling up production from pilot projects to a portfolio of large-scale commercial projects.

• CAPEX reduction 20% Reduction of investment costs by optimizing the hydrogen value chain and infrastructure synergies
• LCOH Optimization 13% to -18% Optimization of LCOH through selecting the most suitable port and carrier
• Analysis of 4 Scale-Up Scenarios decrease uncertainties and de-risk investment decisions for hydrogen production

Through a strategic and economic evaluation, ENGIE Impact and the Hydrogen Import Coalition identified the optimal route for exporting e-fuels from Brazil to Belgium. This highly competitive solution paves the way for large-scale hydrogen production in Brazil and positions the region as a major player in the global hydrogen market. The success of this project highlights the critical role of collaboration in accelerating the energy transition and unlocking the potential of green hydrogen for a sustainable future.