Hydrogenation is set to play a growing role in biorefining, with tradeable credits issued for cleaner hydrogen use, writes Pamela Machado
Already the world's second-largest biofuels producer, Brazil aims to ramp up its output in the coming years. The push for increased biorefining, which is underpinned by strong legal frameworks, could provide domestic offtake options for clean hydrogen producers.
Brazil trails only the US in terms of its biofuels production. The country's combined biodiesel and bioethanol output reached 43bn litres in 2023, the latest government data show, and production is tipped to rise substantially going forward — not least because of government interventions.
Brasilia last year approved the "fuel of the future" law, a bill that aims to increase the use of biofuels for road transport and that sets minimum blending quotas for sustainable aviation fuel (SAF). The SAF quotas start at 1pc in 2027 and rise to 10pc in 2037. The government hopes the law will unlock 1 trillion Brazilian reals ($180bn) in biofuels investment over the next decade.
A biofuels boom could be a boon for the nascent clean hydrogen industry.
Brazil currently consumes about 500,000 t/yr of hydrogen, mainly in state-controlled Petrobras' refineries and almost exclusively of the conventional kind made from natural gas with unabated emissions. Biorefining alone could roughly double this demand in less than a decade, government energy planning and research agency EPE projects.
Hydrogen demand is poised to grow thanks to the sheer volume of biofuels production, but also because biorefining production routes that use hydrogen as a direct feedstock during the hydrogenation phase — namely the hydroprocessed esters and fatty acids and alcohol-to-jet routes — "are expected to become more relevant", EPE says. Both routes can be used for production of biodiesel and SAF.
Biodiesel produced through the fatty acid methyl esters route — the main technology used in current plants — requires using methanol as a feedstock, which could indirectly boost demand for hydrogen by about 175,000-260,000 t/yr by 2034, EPE estimates.
Not all hydrogen demand for biorefining will necessarily be clean — even in the long term. But supportive regulations could encourage use of renewable hydrogen or supply that involves carbon capture and utilisation or storage (CCUS) over conventional output with unabated emissions.
Cleaning up
Brazil's CBIO scheme provides decarbonisation credits to biofuels producers based on "well-to-wheel" lifecycle emissions and allows these to be traded on Sao Paulo's B3 stock exchange. Trimming the product's carbon content by using cleaner hydrogen in the refining process would lift the amount of credits generated.
Initial plans for this are under way. The Riograndense refinery in the southernmost state of Rio Grande do Sul — owned by Petrobras, petrochemicals firm Braskem and logistics company Ultrapar — is expected to make about 16,000 b/d of SAF and renewable diesel from 2028. And Petrobras has outlined broader plans for using renewable and CCUS-based hydrogen across its refineries.
Many firms have announced plans for large export-focused renewable hydrogen projects in Brazil, but finding domestic anchor demand will arguably be crucial to help the sector to lift-off. Biorefineries could be one such anchor industry, alongside fertiliser production and — further down the line — cement and steel.
Brasilia clearly sees an opportunity to capitalise. The "synergy between bioenergy and hydrogen positions us with unique advantages in the global energy transition", energy ministry biofuels department director Marlon Arraes says.
