Minas Gerais may be facing a rare opportunity: to use low-carbon hydrogen not as a piece of industrial marketing, but as a concrete lever for competitiveness. The decisive point is not only environmental—it is economic. Few regions combine, at the same time, a mineral base, a steelmaking hub, significant thermal demand, and sufficient renewable expansion to test a transition at scale. This is the core of the thesis presented in the attached technical dossier: the value of hydrogen in Minas arises less from export potential and more from the decarbonization of already established value chains.
Why Minas takes the lead
The numbers help explain why. Minas Gerais already totals 13.3 GW of installed solar photovoltaic capacity, according to Agência Minas, and Cemig’s wind atlas indicates potential of up to 40 GW at 100-meter towers. At the same time, the state carries an industrial base that is intensive in both emissions and energy, especially in mining and steelmaking. It is an uncommon combination: growing renewable supply close to an industrial demand that truly requires decarbonization solutions.
The regulatory environment has also advanced beyond the national average. State Law No. 24,940/2024 established objectives for Minas Gerais’ hydrogen policy and adopted a more stringent criterion for “low-carbon hydrogen,” with a limit of up to 4 kgCO2eq per kg of H₂. Decree No. 49,172/2026, in turn, set guidelines for integration with the piped gas infrastructure, required periodic plans for progressive integration, and authorized isolated networks for industrial and logistics hubs. At the federal level, Law No. 14,948/2024 established the legal framework for the sector, defined low-emission hydrogen with an initial value of up to 7 kgCO2eq/kgH₂, and structured instruments such as certification, PHBC, and Rehidro.
This changes the conversation. Minas does not need to sell an abstract promise of a “global hub.” It needs to build a solid domestic market.
Where hydrogen creates value first
The applications with the best risk–return balance appear to be three:
- Controlled blending of hydrogen with natural gas in industrial thermal processes;
- Isolated networks for steelmaking and mining hubs, avoiding the rush to adapt the entire grid;
- Pilot projects with higher technological intensity, preparing for a future transition to low-emission steelmaking routes.
This strategy makes sense because the infrastructure already exists, at least in part. Gasmig reports operating 1,675 km of pipelines and serving 47 municipalities in Minas Gerais. At the same time, the state already hosts assets that reduce the risk of the learning curve, such as Unifei’s CH2V, with a 300 kW electrolysis plant, and Cemig’s project to test hydrogen blended with natural gas in industrial burners and furnaces. In other words: Minas is not starting from scratch.
The turning point lies in steelmaking
But the real structural transformation lies in steelmaking. Data from worldsteel show the difference in average CO₂ intensity between production routes: 2.32 tCO₂ per ton of steel for BF-BOF, 1.43 tCO₂ for DRI-EAF, and 0.70 tCO₂ for scrap-EAF. This is why serious debate has shifted toward the H₂-DRI-EAF combination. It is the most direct route to reduce emissions in primary steel production without relying exclusively on scrap.
But there is no room for technological romanticism. A plant based on hydrogen direct reduction requires suitable ore, rigorous thermal control, abundant renewable electricity, and long-term contracts to sustain the investment. Recent literature points to a demand on the order of 50 to 60 kg of hydrogen per ton of steel in HyDR facilities. This means that each million tons of steel per year drives hydrogen demand into the tens of thousands of tons annually. This is not a showcase project—it is heavy infrastructure.
The most instructive business example comes from the mineral value chain itself. In 2024, Vale and Midrex announced a technical cooperation to advance the use of iron ore briquettes in direct reduction plants. The signal is important: steel decarbonization begins before the furnace. It starts with the quality of the mineral input and the ability to adapt raw materials to new industrial routes.
What still needs to happen
There are, however, three constraints that cannot be glossed over.
- The first is cheap and stable energy. Without it, hydrogen loses competitiveness before it even leaves the electrolyzer.
- The second is industrial execution. Adapting pipelines, burners, metering systems, safety, and storage requires technical discipline, not announcements.
- The third is commercial governance. Without long-term contracts, no one commits capital at a meaningful scale.
Water deserves attention, but without alarmism. From a stoichiometric standpoint, electrolysis consumes about 9 liters of water per kilogram of hydrogen; the real challenge usually lies in water quality, cooling, permitting, and local competition for use—not in a supposed generalized water infeasibility.
My assessment is straightforward: Minas is more likely to lead if it resists the temptation of spectacle. The rational path is less glamorous and far more effective: start with blending, consolidate isolated networks, learn from industrial pilots, and only then scale to DRI-EAF modules prepared for high hydrogen content. If done with rigor, the state can turn its “green gold” into a real industrial advantage, connecting mining, steelmaking, and clean energy within the same territory.
