A study that analyzed data from thousands of Brazilian municipalities identified regions with greater potential for the production and use of green hydrogen – a fuel considered strategic for the decarbonization of emission‑intensive industrial sectors. The research shows that the country has favorable conditions to develop this new energy chain, but it also reveals an important challenge: the main locations of production and consumption do not coincide geographically, which will require significant investments in transport and distribution infrastructure.

The results were published in the International Journal of Hydrogen Energy by Celso da Silveira Cachola and Drielli Peyerl. The work was developed at the Research Center for Innovation in Greenhouse Gases (RCGI), one of FAPESP’s Applied Research Centers (CPAs), based at the University of São Paulo (USP), in partnership with Shell Brasil and with support from the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP).

According to Peyerl, from the Institute of Energy and Environment (IEE) at USP and the project “Energy transition through the lens of Sustainable Development Goals” (ENLENS) at the University of Amsterdam (Netherlands), the objective was to answer a central question for energy transition planning in Brazil: “We wanted to identify which regions of Brazil have the greatest potential to produce and consume green hydrogen in the context of industrial decarbonization.”

Hydrogen has been pointed out as one of the most promising alternatives to reduce emissions in industrial sectors known as “hard‑to‑abate” – those in which decarbonization still faces major obstacles due to technological, energy, or economic limitations. Among these sectors are steelmaking, oil refining, and part of the chemical industry. In these activities, hydrogen can replace fossil fuels in high‑temperature processes or serve as a feedstock in chemical reactions.

When produced by water electrolysis using electricity from renewable sources such as hydropower, solar, or wind energy, it is called “green hydrogen”, as it generates virtually no greenhouse gas emissions during production.

According to Peyerl, the choice of electrolysis as a reference in the study is due to the technological consolidation of this method: “Electrolysis is a relatively mature technology. When we analyze technological development, we use the Technology Readiness Level. And electrolysis is already at a high level of maturity, while other routes are still at experimental stages.”

Despite this, the researcher emphasizes that hydrogen should not be seen as a universal solution to all energy challenges: “Energy transition means diversification. In some sectors, hydrogen is a perfect fit, especially in industrial processes that are difficult to decarbonize. In other cases, direct electrification may be more efficient and cheaper.”

To map the potential for developing this technology in Brazil, the researchers gathered data from 5,569 municipalities to assess production potential and from 2,569 municipalities to estimate industrial consumption potential. The analysis considered six main variables: geographic location of municipalities, proximity to energy infrastructure (power grid, gas pipelines, and ports), industrial CO₂ emissions, water security index, solar incidence, and average wind speed.

This information was analyzed using geographic information systems (GIS) and unsupervised machine learning techniques, including k‑means, hierarchical clustering, and DBSCAN algorithms. The methodology combined statistical and spatial analysis to identify patterns across Brazilian territory.

According to Peyerl, the method is based on overlapping different layers of geographic information: “The idea is to work with what we call a layered methodology. You create separate maps – for example, solar potential, wind potential, energy infrastructure, or industrial emissions – and then overlay these maps to identify regions where multiple favorable factors converge.” This approach makes it possible to identify areas where, for example, high availability of renewable energy overlaps with strong industrial demand for decarbonization.

The results showed seven clusters with high potential for green hydrogen production and ten clusters with the greatest potential for industrial consumption. The Northeast appears as the region with the highest production capacity due to the combination of strong solar and wind resources. Meanwhile, consumption clusters are concentrated mainly in the South and Southeast, home to a large share of Brazil’s industrial base and where industrial emissions are highest. This spatial mismatch creates a structural challenge for the development of the hydrogen economy in Brazil. “Today we are very focused on production, but we need to look at the entire value chain. The major challenge is ensuring that the hydrogen produced actually reaches the sectors that will use it,” Peyerl highlights.

Potential clusters of green hydrogen consumption for industrial decarbonization in Brazil
(image: Celso da Silveira Cachola and Drielli Peyerl)

One of the strategies discussed by the researchers to overcome this spatial gap is the creation of hydrogen hubs – industrial centers where production and consumption are located close together. “When you create a hub, you produce hydrogen near the industries that will use it. This reduces energy losses and lowers transport costs,” says Peyerl. According to the researcher, this model has been explored in several countries as a way to accelerate hydrogen adoption in industry. In addition, forming such hubs can facilitate planning for energy and logistics infrastructure, enabling investments to be concentrated in strategic regions.

The study also highlights the need to develop new transport and storage systems to enable the hydrogen value chain in Brazil. Alternatives include adapted hydrogen pipelines, maritime transport, and conversion into derivatives such as green ammonia. “For long distances, it is often preferable to convert hydrogen into green ammonia because there is already know‑how for transporting ammonia by ship and existing port infrastructure,” Peyerl explains.

Another relevant issue is the energy cost of production. Generating hydrogen through electrolysis demands large amounts of renewable electricity, reinforcing the importance of placing production plants in regions with abundant solar or wind energy (read more at: agencia.fapesp.br/55548).

The study reinforces Brazil’s strategic position in the energy transition. The country has one of the most diverse and renewable energy matrices in the world. According to the National Energy Balance (BEN), prepared by the Energy Research Company and the Ministry of Mines and Energy, the share of the main energy sources in the Brazilian matrix is as follows: oil and derivatives, 34.3%; sugarcane biomass (ethanol and bagasse), 18.0%; hydroelectric, 12.4%; natural gas, 12.2%; charcoal, 8–9%; mineral coal, 5.3%; nuclear, 1.4%; wind, 1–2%; solar, 1%; other renewables, 7% (base year 2023).

It is worth noting that around 45%–50% of Brazil’s energy matrix is renewable, compared to a global average of about 15%. In addition, more than 80% of Brazil’s electricity comes from renewable sources, a figure far higher than in most industrialized countries. According to the National Energy Plan 2050, integrating hydrogen may play an important role in further decarbonizing Brazil’s energy matrix, especially in the industrial sector.

But as Peyerl emphasizes, the country’s energy strategy must leverage its resource diversity: “Brazil has enormous potential for hydrogen, but also for electrification, biomethane, biomass, and other energy routes. The challenge is identifying which solution makes the most sense in each region.”

The study was also supported by FAPESP through a Young Investigator Research Grant, awarded to Peyerl.

The article “Mapping green hydrogen clusters in Brazil: A data‑driven approach for industrial decarbonization” can be accessed at
sciencedirect.com/science/article/abs/pii/S0360319925062056.