“Brazil can become the largest producer and exporter of green hydrogen on the planet”

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“The math is quite simple: on the one hand, the country is already able to produce the cheapest green hydrogen in the world…”

Rodrigo Santana is the operations director for Latin America at Atlas Agro, with a degree in administration from FCAP, a postgraduate degree in lean manufacturing and business logistics, and an MBA from Alliance Manchester Business School.

Atlas Agro is a company focused on producing nitrogen fertilizers with zero carbon emissions to the environment.

Rodrigo Santana, director for Latin America at Atlas Agro

AgriBrasilis – Will green hydrogen revolutionize fertilizer production?

Rodrigo Santana – An energy vector and primary fuel, clean and versatile, green hydrogen (H2V) has the potential to become a strategic axis in the energy transition process and decarbonization of production sectors in various segments.

H2V can be used in various applications, reducing greenhouse gas emissions in sectors that are difficult to decarbonize, such as: nitrogen fertilizers, mining, methanol and steel production, heavy vehicle transport, etc.

Today, we import more than 85% of the fertilizers we use in Brazil. This amount is equivalent to more than US$8 billion. Almost all nitrogen fertilizer used in Brazil is produced using fossil sources, with a strong penetration of products imported from countries such as Russia. Therefore, the use of H2V in the manufacture of nitrogen fertilizer is a measure that guarantees the replacement of high carbon footprint products with a clean and sustainable manufacturing product.

In addition to being used to replace fossil energy production methods with sustainable manufacturing models, the use of H2V in the nitrogen fertilizer industry is also a great opportunity for green reindustrialization and food security in Brazil.

Nitrogen fertilizers’ main raw material is ammonia (NH3), a molecule formed by nitrogen and hydrogen atoms. Today, the fertilizer industry uses hydrogen from fossil sources, such as coal and natural gas. By extracting this hydrogen, they release a significant amount of carbon into the atmosphere, making this an industry that emits more than 900 million tonnes of carbon into the atmosphere annually.

Atlas Agro will produce nitrogen fertilizers by extracting hydrogen from water, a molecule that does not contain associated carbon atoms. In order to carry out this separation of the molecule we will need to use a large amount of renewable energy, so that this process is green and 100% sustainable.

AgriBrasilis – Can Brazil become a global power in H2V? What challenges need to be overcome for this technology to be successful?

Rodrigo Santana – Worldwide, H2V has the potential to represent between 12% and 22% of all energy demand by 2050. According to Mckinsey consultancy, Brazil could have an entire new electrical matrix dedicated to H2V production by 2040. This means more than R$ 1 trillion in new investments in the period, aimed at generating electricity, new transmission lines and more fuel manufacturing units and associated structures, including port terminals, pipelines and storage.

In practice, Brazil could become the largest producer and exporter of H2V on the planet. The math is simple: on the one hand, the country is already able to produce the cheapest green hydrogen in the world. This occurs precisely because of the high competitiveness of solar and wind sources, as 70% of the cost of producing the fuel is spent on electrical energy. On the other hand are the European, Asian and North American markets, which will need to buy the more competitive H2V to meet the goals of combating global warming and reducing pollutant emissions.

The challenge in Brazil for this market is the creation of ambitious, urgent and assertive public policies in favor of H2V. For the world to achieve gas emissions neutrality by 2050, Brazil needs to do its part and can even transform this challenge into a great opportunity to accelerate its socioeconomic and environmental development, offering sustainable products and services to the world. For Brazil to produce the most competitive renewable hydrogen in the world, it is therefore necessary to develop appropriate public policies, programs and incentives.

Currently, Brazil has the Federal Government’s National Hydrogen Program, which should prioritize and encourage hydrogen production routes from renewable sources.

Among the measures discussed between the public authorities and the private sector, the inclusion of renewable hydrogen in the National Energy Policy, more favorable financing conditions, reduction of the tax burden (PIS/COFINS, ICMS, IPI, II, IR, and CSLL), expansion of transmission lines and tax credits for the production chain of the hydrogen from renewable sources, etc.

AgriBrasilis – What are the differences in cost and final price between fertilizers produced traditionally and those produced with H2V?

Rodrigo Santana – According to the LCOH Brazil Index from consultancy Celan Energy Latin America, it is now possible to produce H2V in Brazil with a levelized cost between US$ 2.87/kg and US$ 3.56/kg, in some strategic locations. However, with optimizations and incentives, these values can reach US$ 1.69/kg, with highly competitive costs compared to hydrogen produced from fossil and polluting sources.

Atlas Agro has an innovative business model aligned with improvements in the production process, including two patents submitted, where we will be able to deliver highly competitive green nitrogen fertilizers to the regions where we will serve.

AgriBrasilis – What is Atlas Agro’s role in this market? What are the company’s plans for Brazil and Latin America and how much should be invested in this region?

Rodrigo Santana – Atlas Agro is developing projects to build a series of green nitrogen fertilizer factories on an industrial scale in the USA and Latin America, especially in Brazil. These factories will use H2V in their production process, instead of fossil fuels.

In Brazil, Atlas Agro announced the installation of its first nitrogen fertilizer manufacturing unit based on H2V, which will be implemented in Uberaba, State of Minas Gerais, with total investments of US$ 850 million.

The plant will use a 100% clean matrix, using renewable sources, such as solar and wind to produce H2V, green ammonia, and zero-carbon nitrogen fertilizers. The factory will also have a production capacity of 500 thousand tons of fertilizers per year to serve customers in the region.

Atlas Agro has the appetite to install six or seven more factories in Brazil by 2040.



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