image: Eduardo da Rosa Silva, business developer at the Netherlands Organization for Applied Scientific Research (TNO)
Credit: Elton Alisson/Agência FAPESP
At the beginning of this decade, the Netherlands considered importing “green” hydrogen from countries such as Brazil to be one of the main ways to decarbonize its steel industry. This strategy led to the formalization of an agreement in 2023 to establish a trade corridor between Ceará state and Europe via the ports of Pecém and Rotterdam. The agreement provided two options for cooperation: exporting raw hydrogen to supply the European steel industry or manufacturing and shipping “green” steel – produced using sustainable hydrogen – directly from Brazil.
A study by Clara Rabelo Caiafa Pereira, a postdoctoral researcher in the Technology, Innovation, & Society Research Group at Eindhoven University of Technology (TU Eindhoven), indicates that the second option is far more efficient, both environmentally and socioeconomically. The results were presented during a lecture at FAPESP Week Netherlands, an event held from October 27 to 29 in Leiden.
By comparing the economic models of the two routes, Pereira demonstrated that processing the metal in Ceará would reduce greenhouse gas emissions by 25% over the product’s life cycle. It would also lower operating costs for European industry and avoid the significant energy losses associated with the conversion, liquefaction, and long-distance maritime transport of hydrogen.
“Processing ‘green’ steel in Ceará enhances the synergies between climate action and inclusive local development,” stated Pereira.
Since “green” steelmaking is considerably more labor-intensive than operating hydrogen plants independently, it generates higher-skilled jobs in the Northeast of Brazil. According to Pereira, this measure helps mitigate fears that the energy transition might reproduce old extractivist patterns in developing countries.
European territorial restrictions
The economist’s analysis is part of the debate sparked by the January 2026 advisory report, “To Choose or to Lose,” published by the Dutch Scientific Climate Council. The report warned the Dutch government that it would be impossible to keep all energy-intensive industries within its emissions-neutral territory.
The country faces severe territorial constraints due to high population density, a shortage of workers, and congestion in the power grid. As Pereira noted, decarbonizing Dutch steel production using only hydrogen would require about 20% of all the electricity generated in the country in 2024. This would make it impossible to meet the needs of other sectors of the economy.
In her postdoctoral research, Pereira expanded her simulations to include the chemical industry and the trade of intermediates, such as low-carbon iron, a pre-processed metal alloy with low emissions, as well as the dynamics of regional labor markets.
Pereira noted the need to align professional training programs with the actual pace of project implementation. She recalled the initial experience in Ceará, where thousands of people were trained for the “green” hydrogen supply chain before actual demand materialized. “Subnational planning must organize ongoing retraining programs to balance the supply of workers with the actual creation of jobs,” she said.
Mirror economies
Eduardo da Rosa Silva, a business developer at the Netherlands Organization for Applied Scientific Research (TNO), explained that short-term priority opportunities between Brazil and the Netherlands are continuously linked along the industrial corridor.
This strategy includes producing intermediates of “green” pig iron (an initial alloy obtained by reducing iron ore with sustainable charcoal) in Brazil to supply the European steel industry; mobilizing and densifying second-generation biomass residues through torrefaction (a thermal treatment that increases the energy density of organic matter) and pelletization (compacting into small granules); strengthening cooperation in chemical research and development (R&D); and licensing Dutch biomass gasification technologies.
“Brazil and the Netherlands face common challenges in energy transition, stemming from economic structures that mirror one another. Brazil offers low-cost renewable electricity, vast quantities of agricultural and forestry biomass – such as sugarcane bagasse and eucalyptus – and strong academic capacity. Meanwhile, the Netherlands has a consumer base willing to pay for ‘green’ attributes, financial capacity, and excellence in logistics and systems integration,” Silva noted.
As an anchor project for immediate action, Silva highlighted the application of gasification technology in Brazil to convert sugarcane and eucalyptus waste into carbon-negative biomethane, a renewable gas whose production process removes more carbon from the atmosphere than it emits. This project takes advantage of the provisions of the Fuel of the Future Law and the issuance of Biomethane Guarantee of Origin Certificates (CGOB). These digital certificates track and verify the environmental attributes of biomethane produced and sold in Brazil, as well as the decarbonization credits from the RenovaBio program (CBIOs).
Despite the maturity of these technological solutions, the speakers emphasized that the central obstacle to consolidating these investments is the difficulty of attracting private investment and the high initial cost of the projects. To attract private investment, Silva advocated for the formalization of long-term purchase agreements to ensure revenue predictability before construction begins.