Integrated assessment of hydrogen production and use in Brazil: environmental performance, economic feasibility and social benefits

Abstract

This work presents an integrated assessment of hydrogen (H₂) production and use in Brazil, simultaneously addressing environmental performance, economic feasibility, and socioeconomic benefits. The Life Cycle Assessment (LCA) tool was applied from a “cradle-to-gate” perspective to compare seven H₂ production pathways: water electrolysis powered by wind energy, photovoltaic energy, and the Brazilian power grid; and steam reforming of natural gas, sugarcane ethanol, corn ethanol, and landfill biomethane. Three environmental indicators were evaluated: Global Warming Potential (GWP), Water Scarcity Footprint (WSF), and Fossil Energy Ratio (FER). The results revealed a wide range of impacts across the pathways: GWP varied between 0.6 kg CO₂eq/kg H₂ and 39.1 kg CO₂eq/kg H₂, for electrolysis powered by wind, and the Brazilian power grid for the marginal operation (solely based on natural gas), respectively. WSF ranged from 0.4 for the natural gas-based pathway to 60.9 m³ H₂Oeq/kg H₂ for the photovoltaic-based electrolysis route with battery storage. This variation indicates that renewable-based routes, when battery systems are coupled in H₂ production, can also be water-intensive. FER showed that even renewable routes still have an indirect dependence on fossil fuels, mainly associated with equipment manufacturing. The lowest GWP was evaluated for H₂ derived from wind and PV electricity, however, the analysis of the environmental normalized indicators showed that biomethane and wind-powered electrolysis presented the best overall performance, followed by the steam reforming of sugarcane ethanol. Regarding the use of H2, this work evaluated the potential macroeconomic effects derived from ammonia (NH₃) produced using wind and PV electricity. NH₃ is a feasible alternative for storing and transporting H₂ and, also, it is an important input as fertilizer for agricultural. However, even though the renewable energy availability in Brazil for producing NH₃, it still has a strong dependence on imports of NH₃. In this way, from an economic perspective, the levelized cost of electrolytic H2 (LCOH) and its derivative NH₃ (LCOA) were estimated. LCOH range from 3.30 to 6.94 USD/kg H₂ and LCOA varied between 778.2 to 1,908 USD/t NH₃, depending on the electricity source. For NH₃, projected costs remain around 62% higher than fossil-based NH₃, reinforcing the need for incentive policies. Regarding socioeconomic aspects, the results showed that a domestic low-carbon H₂ and NH₃ value chain could result into negative economic effects, suggesting that the energy transition should be financed through a diversified set of instruments, such as carbon pricing, tariffs on fossil products, and incentives for domestic production of electrolyzers and photovoltaic panels. It is concluded that Brazil has high technical potential to become a relevant player in the global low-carbon H₂ and NH₃ market but faces structural challenges to consolidating a competitive industry. Partial localization of the supply chain can reduce costs, increase socioeconomic benefits, and align the country with decarbonization targets. This research underscores the need for an integrated national strategy combining industrial, energy, and agricultural policies to enable the transition to a low-carbon economy based on low-carbon H₂.