The Week in Alt Fuels: Brazil’s power play
This year's COP30 climate summit has put Brazil's renewable energy potential in the spotlight. Yet the country is still a long way from being ready for large-scale bunkering of alternative fuels.
The 30th conference of the parties (COP30) under the UN Framework Convention on Climate Change has drawn global leaders and shipping representatives to Brazil's Belém for two weeks of negotiations on the pace of the global energy transition, including shipping.
Brazil was among the countries that voted against delaying the adoption of the IMO’s Net-Zero Framework (NZF) last month, signalling support for trying to keep shipping’s global decarbonisation timelines on track.
And the country has also featured in studies by Trafigura, the Global Maritime Forum and the International Council on Clean Transportation (ICCT) as a possible bunker destination for alternative fuels given its strong renewable energy potential and geographical position along major Atlantic trade routes.
The ICCT identified the ports of Santos, Rio Grande, Itaqui, Açu, Pecém and Navegantes as best suited for alternative fuel bunkering due to their infrastructure readiness, access to renewable electricity and international connectivity.
Availability of low-cost renewable electricity is one of Brazil’s main advantages.
Hydropower accounted for 64% of its total electricity mix in 2024, followed by wind (17%), solar PV (11%) and biofuels (8%), according to the International Energy Agency.
“Wind power generation is expected to increase by an average of 9.1% annually through 2027. Solar PV is the fastest growing source, with a projected average annual growth of 23.5% from 2025 to 2027,” the IEA wrote.
The International Renewable Energy Agency (IRENA) estimates the levelised cost of solar energy in Brazil at $0.036/kWh and wind at $0.030/kWh in 2024, which is among the lowest levels globally.
This access to cheap renewable power underpins several planned e-fuel projects that could eventually supply ships.
HIF Global is developing an 800,000 mt/year e-methanol plant by the Port of Açu.
GoVerde is planning two e-methanol facilities in Bahia and Pernambuco, each with initial capacities of 300 mt/day. They are scheduled to start running between 2027-2028. Petrobras and European Energy have announced plans for a commercial-scale green methanol plant in Pernambuco, but have not given much detail.
Spain’s Sempen aims to build a 1 million mt/year green ammonia plant by the Port of Açu by 2030.
The government has also taken early steps to support green hydrogen production. Last year, Brazil introduced a tax credit scheme for low-carbon hydrogen production between 2028-2032.
Credit limits are set to start at R$1.7 billion ($320 million) in 2028 and rise to R$5 billion ($945 million) in 2032. The value of each credit will depend on the greenhouse gas intensity of hydrogen produced, according to Bruno Chedid of Brazilian law firm Mattos Filho.
Yet despite this theoretical potential, Brazil’s practical readiness for alternative fuel bunkering remains limited.
Dedicated bunkering infrastructure and port guidelines for fuels like methanol or ammonia have yet to materialise, and most e-fuel projects are still several years from completion.
For now, the country’s only tangible alternative fuel activity lies in biofuel bunkering in select ports.
B24-VLSFO was indicated at $688/mt in Rio Grande this week. If we convert that to a B30-VLSFO representative price, it would be at a $22/mt premium over Singapore on the same day. But it would be competitive with other ports, including discounts of $36/mt discount to Antwerp, $66/mt to Gibraltar and $152/mt to Lisbon.
Brazil’s renewable capacity and policy support have given it the ingredients to become a future green fuel player. But translating that into operational readiness “will require substantial investment and collaboration from all stakeholders involved, including port authorities, shipping companies and government agencies,” the ICCT notes.
In other news this week, Germany’s EnviTec Biogas said it has signed a deal to supply liquefied biomethane (LBM) to Baltic ferry operator TT-Line. EnviTec supplied a 40 mt LBM stem by truck to TT-Line’s passenger and roll-on/roll-off ferry Peter Pan. The stem was delivered in the German port of Travemünde as part of a bunkering trial.
German engine maker Everllence unveiled its new two-stroke ammonia marine engine, which used 5% pilot fuel during full load during testing. The first of these engines will be installed on four pure car and truck carriers (PCTCs) ordered by Norwegian shipping company Höegh Autoliners, with deliveries scheduled by 2027.
Australian port operator TasPorts and green hydrogen developer H2U Group plan to develop a large-scale green hydrogen and ammonia production and export facility at the Bell Bay port in Tasmania. The proposed facility will have an initial production capacity of up to 500,000 mt/year of green ammonia, with room for expansion.
By Konica Bhatt
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