Brazil's Strategic Move into Green Hydrogen: Azevedo & Travassos and Petrobras Forge Ahead

Brazil is emerging as a pivotal player in the global green hydrogen race, driven by a confluence of strategic partnerships, government policy, and infrastructure investments. At the heart of this transformation is the collaboration between Azevedo & Travassos and Petrobras, two pillars of Brazil's energy sector, which are accelerating the country's transition to low-carbon energy. Their joint ventures, coupled with a robust regulatory framework and international interest, signal a compelling investment opportunity in Brazil's hydrogen value chain.

Azevedo & Travassos and Petrobras: A Catalyst for Change

The recent R$1.8 billion contract between Azevedo & Travassos (through its subsidiary Heftos Oil and Gas) and Petrobras to develop a hydrogen generation unit at the Boaventura Complex in Itaboraí, Rio de Janeiro, underscores the urgency of Brazil's energy transition. This project, which will produce 75,000 barrels per day of diesel S-10 and 20,000 barrels per day of aviation kerosene, is not merely an industrial upgrade but a strategic pivot toward cleaner fuels. Azevedo & Travassos leads 80% of the project, while Linhares Engineering handles the remaining 20%, reflecting a collaborative model that leverages expertise and capital efficiently, as reported by Click Petróleo e Gás.

Petrobras, long a symbol of Brazil's oil dominance, is now repositioning itself as a leader in green hydrogen. The company's broader strategy includes investments in solar energy, biorefineries, and hydrogen hubs, aligning with global decarbonization trends. For instance, Petrobras has allocated over $16.3 billion for low-carbon initiatives through 2030, with a significant portion dedicated to hydrogen projects, according to Enkiai. This shift is not without precedent: the state-owned giant has already partnered with Strohm and TechnipFMC to develop deepwater pipeline solutions, demonstrating its commitment to integrating hydrogen into its operations.

Government Policy: The Enabling Framework

Brazil's regulatory environment has become increasingly favorable for green hydrogen. Law 14,948/2024, enacted in August 2024, established a comprehensive legal framework for low-carbon hydrogen production, storage, and export. This law introduces tax incentives, voluntary certification mechanisms, and the Special Incentive Regime for Low-Carbon Hydrogen Production (Rehidro), which aims to reduce production costs and attract foreign investment, according to IMARC Group. The National Hydrogen Program (PNH2) further reinforces this momentum, with targets to deploy pilot plants by 2025, achieve cost competitiveness by 2030, and establish hydrogen hubs by 2035, as outlined by Braziliannr.

The government's Energy Transition Acceleration Programme (PATEN), launched in January 2025, provides additional financial support for green hydrogen and other clean technologies. These policies are not abstract ambitions but actionable strategies, as evidenced by the 70 low-carbon hydrogen proposals submitted by December 2024. These projects aim to decarbonize industries such as steel, fertilizers, and chemicals, leveraging Brazil's renewable energy surplus and the government's forecast for R$40 billion in green hydrogen development, according to Valor International.

Infrastructure and Market Dynamics

Brazil's geographic and infrastructural advantages position it as a global hydrogen exporter. The Pecém Industrial and Port Complex in Ceará, for example, is a focal point for large-scale projects. Fortescue's initiative there aims to produce 175,000 tonnes of green hydrogen annually, while Casa dos Ventos (in partnership with TotalEnergies) targets 900,000 tonnes-a scale that could rival existing producers (see analysis by IMARC Group). Brazil's existing port infrastructure and proximity to Europe and Asia further enhance its export potential, reducing logistical costs and time.

The market itself is expanding rapidly. According to a report by IMARC Group, Brazil's green hydrogen market size was valued at USD 36.47 million in 2024 and is projected to reach USD 1,157.54 million by 2033, growing at a compound annual rate of 46.84%. This growth is underpinned by over 111 green hydrogen projects underway across 15 states, with total investments exceeding $82 billion. These projects require approximately 90 GW of new renewable energy capacity, signaling a virtuous cycle of investment in both hydrogen and renewables, as highlighted in a [New Energy Events] (https://newenergyevents.com/111-green-hydrogen-projects-underway-in-brazil-with-us82-billion-in-investments-requiring-90-gw-of-renewable-capacity/) report.

Strategic Alliances and Global Recognition

International partnerships are amplifying Brazil's hydrogen ambitions. The collaboration between Vale and Green Energy Park (GEP) has been recognized by the European Union as a flagship initiative under the Global Gateway Program; the partnership details are available from Green Energy Park. Similarly, Petrobras's pilot electrolysis plant, funded in part by a BRL 90 million investment, is a critical step toward integrating hydrogen into refining processes, according to Agência Petrobras.

Investment Opportunities and Risks

For investors, Brazil's hydrogen value chain offers a mix of high-growth potential and manageable risks. The country's renewable energy mix-dominated by hydro, wind, and solar-provides a competitive edge in hydrogen production costs. However, challenges remain, including the need for further infrastructure development and the scaling of electrolyzer technology. Yet, with government support, private-sector collaboration, and international partnerships, these hurdles are surmountable.

Conclusion

Brazil's strategic move into green hydrogen is not a speculative bet but a calculated response to global energy transition demands. The partnership between Azevedo & Travassos and Petrobras exemplifies the private-public synergy required to scale this industry. With supportive policies, infrastructure investments, and international recognition, Brazil is poised to become a cornerstone of the global hydrogen economy. For investors, the window of opportunity is narrowing-but the rewards for early engagement are substantial.