ECNETNews reports that Vale has signed a partnership with GEP (Green Energy Park) for the establishment of a green hydrogen production facility in Brazil. This initiative aims to attract raw material manufacturers to support the decarbonization of European steelmaking.
This agreement marks Vale’s second venture of this nature, focusing on harnessing Brazil’s renewable energy resources to convert iron ore into a product known as HBI (hot-briquetted iron), which has the potential to reduce emissions in steel production by up to 80%.
“We are leveraging Brazil’s competitive advantages, such as high-quality iron ore and abundant renewable energy,” stated a company representative. “At the same time, we are fostering the neo-industrialization of Brazil based on a low-carbon economy.”
This partnership follows Vale’s Mega Hub model, aimed at establishing industrial complexes for low-carbon steel production. Earlier in September, the company had signed a similar agreement with a Swedish firm focusing on green steel.
The recent agreement involves Vale investing in the initial phase of mineral processing, specifically pelletizing or briquetting, while GEP will produce green hydrogen for a third partner to convert into HBI.
While investment amounts and the location of the facility have yet to be disclosed, preference is given to a site close to Vale’s existing infrastructure, with operations concentrated in Minas Gerais and areas between Pará and Maranhão.
A company representative emphasized that the steel sector accounts for about 8% of global carbon emissions, primarily due to the use of coal in blast furnaces. Production costs in Europe are expected to rise in the coming years due to increasing carbon taxation.
Steel production using electric furnaces and HBI can reduce carbon emissions from 2 to 0.4 tons for every ton of material produced. “We are providing solutions to a problem that Europe faces—the decarbonization of steelmaking,” noted the representative.
GEP is committed to delivering efficient green hydrogen production technology, seen as a key player in the energy transition for its capacity to replace fossil fuels in industrial processes.
“Our collaboration aims to bring our leading green hydrogen technology to the core of hard-to-abate sectors, providing a highly competitive platform for green steel production both in Europe and worldwide,” stated the CEO of GEP in a recent announcement.
Earlier this year, Vale revealed it had advanced its timeline to achieve 100% renewable electricity sourcing for its Brazilian operations by two years. The miner is now focused on reducing fossil emissions within its mining and transportation infrastructure.
Vale aims to achieve net-zero carbon emissions by 2050, backed by interim goals such as cleaning its energy mix and reducing mineral production emissions by one-third by 2030.
In recent months, Vale has also announced partnerships with manufacturers to develop bi-fuel and electric engines for off-road vehicles, addressing significant challenges in its sustainability efforts.
