Developing a Green Hydrogen Strategy for the State of Piaui, Brazil

Challenge

The government of the State of Piaui in Brazil, via its investment agency, Investe Piaui, decided to explore the potential to produce green hydrogen (H₂) through the creation of a green hydrogen valley. Producing green hydrogen at scale requires an abundance of renewable energy, capital, and expertise. The State, having some of the best solar and wind conditions in South America and a fully green electricity grid, already ticks the first box. To bridge the gap to the other two, the State is keen to bring investment and state-of-the-art knowledge to the region.

In addition to the resources needed to produce green hydrogen, Piaui lacks the broader infrastructure for storage, transportation, and distribution of H₂, and currently has only a few potential internal off-takers. However, the sustainability agenda in Brazil is evolving quickly, providing Piaui with the type of favorable policies and regulations, including incentives, needed to attract the right partners and build infrastructure at scale.

Solution

Needing to enlist an experienced partner, Investe Piaui connected with ENGIE Impact, part of ENGIE Group, which has a robust industrial network in the region and a thorough understanding of the green hydrogen space, having conducted analysis and helped developed hydrogen valleys in Chile, Peru, and South Africa.

Developing a hydrogen valley strategy requires sizing the demand for export and internal use, assessing cost competitiveness and the business cases around green H₂, while creating an actionable roadmap and identifying policy enablers. Concerning policy, the Piaui government is already working on a “special trade zone” with tax rebates on equipment (e.g., electrolyzers) and finished products (H₂ and ammonia), as well as a flexible permitting scheme.

Having ENGIE Impact on board helped sway the decision of private infrastructure developer Green Energy Park to select Piaui as the location for its first upstream green ammonia facility to supply its global distribution network.

Results

The collaboration between Investe Piaui and ENGIE Impact is at the feasibility study stage. ENGIE Impact’s roadmap identifies the best technological options to produce green hydrogen, the potential off-takers, and the optimal locations for three hydrogen hubs in the valley. Various scenarios have been created concerning the timing (2030 and 2050), and the potential levels of green H₂ demand in Europe and elsewhere. ENGIE Impact has:

• Interviewed ~25 stakeholders, including project developers, potential off-takers and other enablers of the H₂ economy in Brazil and abroad (mainly in the EU)
• Identified 10 suitable ports and four countries in Europe that may be key H₂ importers
• Identified advantages of Piaui over other potential H₂ producers, such as having the resources to produce green H₂ at competitive prices, geographical proximity to Europe, and compliance with EU regulations
• Identified and characterized the three best sites to produce green H₂
• Identified the four most promising green H₂ applications and proposed pilot projects to develop them: ammonia export to the EU, mining trucks, green steel, and fertilizers

Finally, the EU has confirmed a significant investment in the Piaui region as part of the €2B in Global Gateway funding to develop the hydrogen value chain in Brazil. The Global Gateway initiative is the EU’s strategy to finance infrastructure projects globally, focusing on securing energy supplies for Europe. The renewable hydrogen and ammonia export from Piaui will mainly supply industries in Europe.