Brazil’s biggest nitrogen fertiliser maker has begun construction on the initial 60MW first phase of what “is expected to be” the largest integrated green hydrogen and green ammonia plant in the world.

Sao Paulo-based Unigel is investing an initial R$650m ($122m) in the new factory in Camaçari, Bahia state — the country’s first green hydrogen plant — which will use three 20MW alkaline electrolysers from German manufacturer Thyssenkrupp Nucera to produce the H2.

The first phase will have an initial annual capacity of 10,000 tonnes of green hydrogen and 60,000 tonnes of green ammonia, and is due to begin production in late 2023.

A second phase — quadrupling the output of hydrogen and ammonia — is scheduled to start operation in 2025.

“The products will be offered to customers who aim to decarbonise their production chains, eg, the steel industry, oil refining, and e-fuels,” said Unigel in a press release. “Green ammonia will also be used in the value chain of Unigel, as it is a raw material in the manufacturing of fertilisers and acrylics.”

But one line in the press raises questions over how green the project truly is.

“Around three quarters of the energy used in electrolysis of the project comes from renewable sources,” it states.

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This is despite the fact that Unigel has an off-take agreement with local wind developer Casa dos Ventos to buy R$1bn of energy from the 360MW Babilonia Sul wind farm, which is also in Bahia state — and that about two thirds of the country’s electricity comes from hydropower.

“Given the potential of Brazil in the generation of wind and solar energy, we believe that the country has a great opportunity to be a reference for the world in green hydrogen, a solution that brings versatility to transform renewable energy into raw materials and zero carbon fuels,” said Unigel CEO Roberto Noronha Santos.

And Thyssenkrupp Nucera CEO Werner Ponikwar suggested that the H2 produced at the new facility may already be cost-competitive with grey hydrogen derived from unabated fossil fuels.

“As Brazil is one of the world-leading countries in terms of installed renewable energy, we are pleased to enter this partnership to make green hydrogen an affordable energy vector already today,” he said.