Vale and Green Energy Park (GEP), an integrated European H₂ company, have joined forces to deliver decarbonization solutions for the global steel sector. Through this partnership the companies will work on feasibility studies to develop a green H₂ production facility to supply a future mega hub in Brazil, an industrial complex aimed at manufacturing low-carbon steel products. This joint initiative can 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 mega hubs in Brazil, aligned with its strategic objective to foster 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 H₂ 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,” said 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 H₂ 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 H₂ 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,” said Bart Biebuyck, CEO of GEP. “Together, we are looking forward to accelerating the green H₂ 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 H₂ 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.

Vale and GEP, which is supported by Europe’s Global Gateway program, will also collaborate on various aspects of the H₂ value chain, such as the deployment of electrolyzers, the design of industrial plants for green H₂ and its derivates, as well as other industrial decarbonization applications of renewable H₂.

To drive down the costs, Green Energy Park will implement state-of-the-art electrolyzer technologies on a standardized production platform. The integrated H₂ production plant by Green Energy Park features some of the most advanced process engineering designs, including storage and handling facilities for H₂ and its derivatives. As such, GEP contributes deep engineering and engineering, procurement and construction (EPC) expertise in the field of world-scale cryogenic gas handling and storage, combined with dedicated infrastructure and industrial construction capabilities.