By Brazil Stock Guide – Axia Energia has signed a partnership with German development agency GIZ to build what it says will be Brazil’s first green hydrogen plant dedicated to producing low-carbon steel, aiming to cut emissions in one of the world’s most carbon-intensive industries.
The project is part of the develoPPP program, financed by Germany’s Federal Ministry for Economic Cooperation and Development (BMZ), and is designed to position Brazil as a global reference in sustainable steelmaking, leveraging the country’s renewable energy resources.
Axia said the plant will have capacity of up to 10 megawatts and will convert renewable electricity — from solar, wind or hydropower — into green hydrogen. The hydrogen will be supplied to a partner steel mill, replacing fossil fuels such as coal-based coke or natural gas used in traditional blast furnaces, significantly reducing carbon emissions.
The initiative also seeks to demonstrate commercial-scale economic viability, develop certification methodologies and train professionals, with the goal of strengthening Brazil’s green hydrogen and low-emission steel value chain.
“Axia Energia’s purpose is to offer sustainable solutions that drive decarbonization across different productive chains and reinforce its leadership in the energy transition,” said Juliano Dantas, the company’s vice president for innovation, R&D, digital and IT, in a statement.
Jochen Quinten, GIZ Brazil’s national director, said the partnership will apply accumulated technical expertise to a key industrial sector. “With Axia, we are now taking a decisive step by bringing this knowledge and experience to a key industry such as steelmaking,” he said.
The International Renewable Energy Agency estimates steel production accounts for about 7% of global CO2 emissions. In Brazil, despite abundant renewable resources, steel output still relies heavily on fossil fuels, exposing producers to growing regulatory and market risks, including carbon taxation and trade barriers in countries demanding low-emission industrial products.
Axia said the hydrogen-based steel process starts with renewable electricity generation, which powers electrolysis plants that split water molecules into oxygen and hydrogen. The hydrogen is then integrated into steelmaking operations, partially or fully replacing coke or natural gas in blast furnaces or auxiliary systems, allowing for the production of lower-carbon steel and intermediate products.