A study analyzing data from thousands of Brazilian municipalities identified regions with the greatest potential for producing and using green hydrogen, a fuel considered strategic for decarbonizing emission-intensive industrial sectors. While the research shows that Brazil has favorable conditions for developing this new energy chain, it also reveals a major challenge: the main sites of green hydrogen production and consumption do not coincide geographically. This will require significant investments in transportation and distribution infrastructure.
The results were published in the International Journal of Hydrogen Energy by Celso da Silveira Cachola and Drielli Peyerl . The study was conducted at the Research Center for Greenhouse Gas Innovation ( RCGI ), one of FAPESP's Applied Research Centers ( ARCs ), based at the University of São Paulo (USP), in partnership with Shell Brazil and with support from the National Agency of Petroleum, Natural Gas, and Biofuels (ANP).
Peyerl, from the Institute of Energy and Environment at the University of São Paulo (IEE-USP) and the "Energy Transition Through the Lens of Sustainable Development Goals (ENLENS)" project at the University of Amsterdam in the Netherlands, explains that the objective was to answer a central question for planning the country's energy transition: "We wanted to identify which regions of Brazil have the greatest potential to produce and consume green hydrogen in the context of industrial decarbonization."
Hydrogen has been identified as one of the most promising alternatives for reducing emissions in industrial sectors known as "hard-to-abate" – those in which decarbonization still faces major obstacles due to technological, energy, or economic limitations. These sectors include steelmaking, oil refining, and parts of the chemical industry. In these processes, hydrogen can replace fossil fuels or serve as a raw material in chemical reactions.
Green hydrogen is produced through water electrolysis using electricity from renewable sources, such as hydroelectric, solar, or wind power. This method generates virtually no greenhouse gas emissions during production.
According to Peyerl, electrolysis was chosen as the benchmark in the study due to the technological maturity of this method. "Electrolysis is a relatively mature technology. When analyzing technological development, we use the Technology Readiness Level. And electrolysis is already at a high level of maturity, while other routes are still in the experimental stages."
Nevertheless, the researcher emphasizes that hydrogen should not be viewed as a universal solution to all energy challenges. "The energy transition is about diversification. In some sectors, hydrogen is a perfect fit, especially in industrial processes that are difficult to decarbonize. In other cases, direct electrification may be more efficient and cheaper," she says.
To map the development potential of this technology in Brazil, the researchers gathered data from 5,569 municipalities to assess production potential and from 2,569 municipalities to estimate industrial consumption potential. The analysis considered six main variables: geographic location, proximity to energy infrastructure (electric grids, gas pipelines, and ports), industrial CO₂ emissions, the water security index, solar irradiance, and average wind speed.
Geographic information systems (GIS) and unsupervised machine learning techniques, including the k-means, hierarchical clustering, and DBSCAN algorithms, were used to analyze this information. The methodology combined statistical and spatial analysis to identify patterns across Brazil.
According to Peyerl, the method is based on overlaying different layers of geographic information. "The idea is to work with what we call a layered methodology. You create separate maps – for example, of solar potential, wind potential, energy infrastructure, or industrial emissions – and then overlay those maps to identify regions where various favorable factors are concentrated." This procedure allows one to visualize areas where high availability of renewable energy coexists with high industrial demand for decarbonization, for example.
The results revealed seven clusters with high potential for green hydrogen production and ten clusters with greater potential for industrial consumption. The Northeast region has the highest production potential thanks to its abundant solar and wind energy resources. Consumption clusters, on the other hand, are concentrated mainly in the South and Southeast, home to much of Brazil's industrial base and high levels of industrial emissions. This spatial disparity poses a structural challenge to developing the hydrogen economy in Brazil. "Today, we're very focused on production, but we need to consider the entire value chain. The big challenge is ensuring that the hydrogen produced actually reaches the sectors that will use it," Peyerl emphasizes.
One strategy the researchers have discussed to bridge this spatial gap is creating hydrogen hubs – industrial clusters where production and consumption are close together. "When you create a hub, you produce hydrogen near the industries that will use it. This reduces energy losses and lowers transportation costs," Peyerl comments. According to the researcher, this model has been discussed in several countries as a way to accelerate the adoption of hydrogen in industry. Furthermore, forming these hubs can facilitate energy infrastructure and logistics planning, enabling investments to be concentrated in strategic regions.
The study also emphasizes the need to develop new transportation and storage systems to establish a viable hydrogen supply chain in Brazil. Among the alternatives are gas pipelines adapted for hydrogen, maritime transport, and conversion into derivatives such as green ammonia. "For long distances, it's often preferable to convert hydrogen into green ammonia because the know-how and adapted port infrastructure for transporting ammonia by ship already exist," notes Peyerl.
Another relevant issue is the production cost of energy. Since hydrogen generation via electrolysis requires large amounts of renewable electricity, it is important to locate production plants in regions with abundant solar or wind energy.
The study reinforces Brazil's strategic position in the energy transition. It has one of the most diversified and renewable energy mixes in the world. According to the National Energy Balance (BEN), prepared by the Energy Research Company and the Brazilian Ministry of Mines and Energy, the share of the main sources in the Brazilian energy mix is as follows: oil and derivatives, 34.3%; sugarcane biomass (ethanol and bagasse), 18.0%; hydroelectric, 12.4%; natural gas, 12.2%; charcoal, 8%–9%; coal, 5.3%; nuclear, 1.4%; wind, 1%–2%; solar, 1%; other renewables, 7% (base year 2023).
It is important to note that approximately 45% to 50% of Brazil's energy mix is renewable, while the global average is around 15%. Furthermore, over 80% of Brazil's electricity comes from renewable sources, which is far higher than most industrialized countries. According to the National Energy Plan 2050 , the incorporation of hydrogen could play an important role in further decarbonizing Brazil's energy mix, especially in the industrial sector.
However, as Peyerl emphasizes, the country's energy strategy must leverage its diverse resources. "Brazil has enormous potential for hydrogen, but also for electrification, biomethane, biomass, and other energy pathways. The challenge is to identify which solution makes the most sense in each region."
The study was supported by FAPESP through a Young Investigators Grant , awarded to Peyerl.
About São Paulo Research Foundation (FAPESP)
The São Paulo Research Foundation (FAPESP) is a public institution with the mission of supporting scientific research in all fields of knowledge by awarding scholarships, fellowships and grants to investigators linked with higher education and research institutions in the State of São Paulo, Brazil. FAPESP is aware that the very best research can only be done by working with the best researchers internationally. Therefore, it has established partnerships with funding agencies, higher education, private companies, and research organizations in other countries known for the quality of their research and has been encouraging scientists funded by its grants to further develop their international collaboration. You can learn more about FAPESP at www.fapesp.br/en and visit FAPESP news agency at www.agencia.fapesp.br/en to keep updated with the latest scientific breakthroughs FAPESP helps achieve through its many programs, awards and research centers. You may also subscribe to FAPESP news agency at http://agencia.fapesp.br/subscribe.
