Petrobras and Gerdau established an agreement for low-carbon business studies

Petrobras and Gerdau have signed a Memorandum of Understanding (MoU) intending to explore commercial opportunities and potential partnerships aligned with both companies' diversification and decarbonization strategies.

"In a strategic move to face the environmental challenges of the 21st century, Petrobras and Gerdau have announced an agreement to explore and develop sustainable solutions within the scope of low-carbon businesses. This partnership involves evaluating potential business models for low-carbon fuels, hydrogen and its products, CCS (capture, transportation, and storage of CO2), R&D projects relating to the integrity of materials in a maritime environment, and steel production via "direct reduction" using natural gas," said Maurício Tolmasquim, Petrobras' Director of Energy Transition and Sustainability.

The direct reduction process is an alternative to the conventional steel production process, which uses natural gas instead of coal.

Gerdau, Brazil's largest steel producer and the largest recycler of scrap metal in Latin America, already has a prominent position with one of the lowest greenhouse gas emissions in the global steel industry due to its sustainable production matrix based on scrap recycling and the use of bioreducer (charcoal).

According to Flávia Souza, Gerdau's Global Director of Energy and Procurement, the steel producer continues to make progress in its commitment to reduce further its greenhouse gas (GHG) emissions intensity, which currently stands at 0.91 t CO₂e per ton of steel to 0.82 t CO₂e per ton of steel by 2031. "With 123 years of history, Gerdau is committed to being part of the solutions to society's challenges and dilemmas, acting collaboratively to build a more sustainable future for the entire planet. Partnerships like this contribute to developing technologies and initiatives aimed at a low-carbon economy, creating avenues of opportunity for the decarbonization of the steel industry," says Flávia.