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EDP and ArcelorMittal sign agreement for green hydrogen project for steel production in Brazil

Thursday 26, October 2023

The two companies will assess the feasibility of a pilot project to supply steel production in the region for a year. The success of this pilot project could determine the expansion of green hydrogen in Brazil.

EDP and the steel company ArcelorMittal Tubarão signed a Memorandum of Understanding (MOU) on Thursday, 26 October, to assess the technical and economic feasibility of a pilot project for the production and use of green hydrogen in the steelmaking process.

The initiative is part of EDP's strategy to expand the production of renewable hydrogen using the company's expertise in this field, in which it pioneered the production of Latin America's first green hydrogen molecule in December 2022. Through this project, ArcelorMittal Tubarão also aims to boost steel production with low carbon emissions.

In the first stage (preliminary feasibility), the technical, economic and environmental aspects of the project will be assessed. The scopes and requirements necessary for its implementation will also be defined, establishing a solid basis for decisions regarding the following stages of the partnership.

The study for this partnership began in August, when the working groups from different areas - such as engineering, project development, environmental, utilities, regulation, and finance - began liaising, working in a collaborative and integrated manner to identify possible mutually beneficial business models.

The feasibility of installing a pilot plant will be assessed according to the results obtained in the various stages of the study, mainly in the Project Definition Stage. In this phase, the investment forecast and the whole project feasibility results will be analysed in detail to enable a decision to implement the hydrogen project. The study should be completed within a year.

The partnership is part of EDP's initiatives to lead the energy transition with investments in renewable energy sources.

"If Brazil is to emerge as a benchmark in the production of green hydrogen, demand is crucial. The partnership with ArcelorMittal is an example of how EDP is working to foster this market and put into practice all our expertise and pioneering spirit in this area. We hope this will be the first project to expand green hydrogen production and EDP's strategic partnerships with different industry segments that can be decarbonised," says João Marques da Cruz, CEO of EDP Brasil.

For the CEO of ArcelorMittal Flat Carbon Latin America, Jorge Oliveira, this initiative aligns with the group's global goal of becoming carbon neutral by 2050, taking part in the transition to a low-carbon economy.

"The study in partnership with EDP represents another significant step on this journey. With this collaboration, we will explore the possibility and feasibility of, in the future, incorporating and applying hydrogen as part of our production process, contributing, together, with alternatives to becoming a carbon-neutral company in the future," explained the executive, adding that this is a pilot project and that, in the future, the feasibility of expanding to other ArcelorMittal units in Brazil will be assessed.