TOTALENERGIES PLANS TO USE BRAZILIAN GREEN HYDROGEN IN EUROPEAN REFINERIES

TotalEnergies SE is considering importing green hydrogen from a multibillion-dollar project under development in northeast Brazil to supply its European refineries.

A French energy company will be the lead buyer of a plant planned by Brazilian renewables developer Casa dos Ventos, people familiar with the matter said, asking not to be identified because the discussions are confidential. TotalEnergies, which has a 34% stake in the developer’s wind and solar unit, is also considering a direct stake in the project, the sources said.

TotalEnergies and Casa dos Ventos have not yet made a final decision on the deal, the sources said. Both companies declined to comment.

The project, which will be developed in several phases in the port of Pecs, could reach an electrolysis capacity of 1.2 gigawatts, producing 160,000 tonnes of green hydrogen per year. Production of green ammonia, which is easier to transport than hydrogen, could reach 900,000 tonnes per year, Casa dos Ventos reports.

Green hydrogen has been promoted as a key fuel for a zero-carbon future, because it is produced by splitting water into hydrogen and oxygen molecules using renewable energy. However, due to costs and technological difficulties, only a few large-scale production projects have reached the construction stage.

The contract with TotalEnergies will be a further step in the oil company’s plan to reduce carbon emissions by replacing 500,000 tonnes of fossil-fuel-derived grey hydrogen used in European refining processes with green hydrogen by 2030.

The move to cleaner but much more expensive gas is due to the European Union’s planned tax on fuel pumps that do not meet cleaner standards, the company said.

So far, the company has signed contracts for more than 130,000 tonnes of green hydrogen to be produced in Europe, with 70,000 tonnes expected to be supplied by Saudi Arabia in the form of green ammonia. Saudi Arabia’s flagship Neom plant, one of the world’s largest green hydrogen plants, is valued at $8.4 billion in 2023 and is expected to come online in 2026, with the goal of exporting up to 1.2 million tons of green ammonia per year.

Casa dos Ventos said it plans to provide about 3 gigawatts of wind and solar energy to power electrolyzers that produce “green” hydrogen. Casa dos Ventos said the development of renewable energy stations and a green hydrogen plant could involve a total investment of about $5 billion.

Brazil is seeking to encourage investment and launch a low-carbon hydrogen industry, and recently passed a long-awaited law offering some tax incentives for projects. South America’s largest economy is capable of producing the world’s cheapest green hydrogen without subsidies, according to BloombergNEF.

A port in the state of Ceara could become Brazil's first major green hydrogen export hub, with other energy companies, including Fortescue, also considering building facilities there.

"The Pec green hydrogen plant will be Brazil's flagship project for hydrogen export," Casa dos Ventos said in a statement. A final investment decision on the plant is expected next year, with operations scheduled to begin in 2029, the company said.