Producing green steel in Brazil may be more advantageous than exporting hydrogen to Europe

A study presented at FAPESP Week Netherlands indicates that producing low-carbon steel in Brazil and exporting it to Europe could yield greater environmental and economic benefits than simply exporting green hydrogen to supply European steel mills. The research, conducted by economist Clara Rabelo Caiafa Pereira from the Eindhoven University of Technology (TU Eindhoven), suggests that processing the metal in the state of Ceará could reduce greenhouse gas emissions over the product's life cycle by 25%, while also lowering industrial costs and increasing the creation of skilled jobs in Brazil’s Northeast region.

Adding value to domestic production strengthens industrial cooperation between Brazil and the Netherlands.

This analysis gains significance in light of the trade corridor established in 2023 between the Port of Pecém, in Ceará, and the Port of Rotterdam, in the Netherlands—a partnership designed to facilitate both the export of low-carbon hydrogen and the supply of steel produced using low-carbon energy. According to the research, carrying out industrial processing in Brazil avoids energy losses associated with the conversion, liquefaction, and long-distance maritime transport of hydrogen, while simultaneously reducing operational costs for the European industry. This alternative also addresses structural constraints in the Netherlands, such as labor shortages, land scarcity, and power grid congestion; decarbonizing the Dutch steel industry using hydrogen alone would require approximately 20% of the country’s total electricity generation in 2024.

For Ceará, the opportunity extends beyond hydrogen production: establishing steelmaking operations adds value to renewable energy, boosts demand for a skilled workforce, and fosters the strengthening and densification of local supply chains. Bilateral cooperation could further advance in areas such as the Brazilian manufacturing of low-carbon iron intermediates, the utilization of second-generation biomass residues, chemical research, and the licensing of Dutch gasification technologies. Among the identified opportunities is the conversion of sugarcane and eucalyptus residues into carbon-negative biomethane, integrated with the traceability and incentive mechanisms established under Brazil’s biofuels policy.

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