Shell Brasil Petroleo, the Brazilian subsidiary of oil and gas giant Shell, and Gerdau, the largest producer of steel bars in Latin America, have signed a binding agreement to form a 50-50 joint venture to build and operate a new solar park in the state of Minas Gerais in eastern Brazil.
The 260 MW solar power plant is due to be built in 2023, after making the final investment decision and settling the rest of the formalities.
Half of the electricity generated will be supplied to Gerdau’s steel mills in Brazil, while the other half will be sold on the free market through energy trader Shell Energy Brasil, another Shell subsidiary.
The new project is in line with Shell Group’s global strategy of offering green energy solutions to customers and advancing decarbonization. The oil and gas giant recently unveiled an update to its short-term strategy that will direct more than 35% of total operating and capital expenditures towards the “ energy transition” in 2022, including products and results that don’t produce Compass 3 emigrations.
Gerdau notes in a statement that the new investment in a solar generation will help the group meet its emissions reduction targets [Gerdau is committed to reducing emissions in coverage categories 1 and 2 to 0.83 tonnes CO2eq. So per ton of steel produced most in 2031. In 2020, this figure for the company was 0.93 tons of CO2. At the same time, the company claims, referring to the World Steel Association, that the world average is 1.89 tons of CO2 eq. per ton of steel].
“This second solar park, in partnership with Shell, reinforces Gerdau’s commitment to significantly reduce greenhouse gas emissions in the coming years in Brazil and around the world, creating a more sustainable future for all. Our investments in renewable energy are part of a broader business diversification plan that complements the steel industry. We are also evaluating wind power opportunities in the Americas,” said Giuliano Prado, vice president of Gerdau.
Purchasing renewable energy by steel companies has become a widespread practice.
In October 2021, a 300 MW solar power plant was commissioned to supply the EVRAZ steel mill in the United States.
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