Vale's decarbonization joint venture

In partnership, the two companies will work on feasibility studies to develop a green hydrogen production facility to supply a future 'Mega Hub' in Brazil, an industrial complex aimed at manufacturing low-carbon steel products. It is hoped that this joint initiative will provide an open platform for international partnerships in which global steel companies can source and produce hot-briquetted iron (HBI) in Brazil and accelerate the emerging low carbon steel industry.

Vale has been actively seeking partners to enable the construction of so-called Mega Hubs in Brazil, aligned with its strategic objective of fostering the country’s low-carbon industry. In these industrial hubs, Vale expects to produce iron ore agglomerates (pellets or briquettes), which will serve as an input to produce HBI (a low-carbon emission steel pre-material) with renewable hydrogen as the reducing agent. The agreement with GEP is another important step in this direction.

“This is a win-win partnership for Brazil and Europe”, says Ludmila Nascimento, director of energy and decarbonization at Vale. “We are leveraging Brazil's competitive advantages, such as high-quality iron ore and abundant renewable energy, to potentially develop green hydrogen supply, which will enable the offer of a 'green' HBI with high added value to European steelmakers. Meanwhile, we are fostering Brazil's new industrialization, based on the low-carbon economy, and contributing to the fight against climate change”.

“The partnership with Vale is a major milestone on our journey to Net Zero. We are proud to work with the largest producer of direct reduction pellets in the world to help decarbonize the steel sector. The collaboration between our companies aims to bring our leading green hydrogen technology to the core of the hard-to-abate sectors, offering a highly competitive platform for green steel production in Europe and around the world,” comments Bart Biebuyck, CEO of GEP. “Together, we are looking forward to accelerating the green hydrogen industry in Brazil.”

The iron and steel industry accounts for approximately 8% of the world’s total carbon emissions, primarily due to the use of coal in blast furnaces. High carbon emissions by the steel industry represents a big challenge for global efforts to reduce greenhouse gas emissions and reach a carbon neutral economy by 2050.

For every ton of steel produced in blast furnaces about 2.0 tons of CO₂ equivalent are released into the atmosphere. In contrast, in the direct reduction route, the HBI produced with green hydrogen as the reducing agent when supplied to electric arc furnaces (EAFs), reduces carbon emissions to approximately 0.4 tons of CO₂ equivalent per ton of steel produced, accounting for all emissions along the value chain. This process therefore results in an 80% reduction in emissions, enabling “green steel” production, explains Vale and GEP.

The Vale and GEP initiative, which is supported by Europe’s Global Gateway programme, will collaborate on various aspects of the hydrogen value chain, such as the deployment of electrolysers, the design of industrial plants for green hydrogen and its derivates, as well as other industrial decarbonization applications of renewable hydrogen.

To drive down the costs, GEP will implement state-of-the-art electrolyser technologies on a standardized production platform. The integrated hydrogen production plant by GEP is claimed to feature some of the most advanced process engineering designs, including storage and handling facilities for hydrogen and its derivatives. As such, GEP contributes deep engineering and EPC (Engineering, Procurement and Construction) expertise in the field of world-scale cryogenic gas handling and storage, combined with dedicated infrastructure and industrial construction capabilities.