Brazil-based chemical company Unigel said it would invest about $1.5 billion in an industrial-scale green hydrogen project in the South American country.

The project would make Unigel the country’s largest producer of green hydrogen.

Unigel said that it owns other pilot projects in Brazil, which are in the experimental stages in Ceará and Rio de Janeiro. The company is currently negotiating terms with industry players to derive access to the capital market through an initial public offering (IPO) to make the new phases of the project market ready.

The company is investing $120 million in the project’s first stage, which is already under construction. It would use electrolysis technology from Germany’s Thyssenkrupp nucera.

The company expects the installed capacity to be 100 thousand tons per year of green hydrogen by 2027.

Roberto Noronha Santos, the CEO of Unigel, said, “We have numerous differentials that allow us to lead Brazil towards the green hydrogen and ammonia economy. First, Unigel already has enough ammonia production capacity to use green hydrogen. In addition, we have access to infrastructure and clean and competitive energy sources at the Camaçari Petrochemical Complex. Finally, Unigel also operates one of the only two ammonia terminals in Brazil, located in the port of Aratu, also in Bahia.”

Once operational, Unigel will offer its customers hydrogen as a fuel for various types of vehicles and as raw material in the steel industry and oil refining.

Last April, integrated hydrogen, ammonia, and methanol producer Aker Clean Hydrogen and its portfolio company collaborated with Statkraft and SOWITEC to explore opportunities in Brazil and India to produce green hydrogen and ammonia.

According to the International Renewable Energy Agency, hydrogen trade would significantly contribute to a more resilient and diversified energy system. Hydrogen is currently being traded through existing, repurposed gas pipelines resulting in the drastic reduction of transport costs. The agency said that as hydrogen becomes an internationally traded commodity, its production will witness increased investments, fulfilling the global energy demand of around $4 trillion by 2050.