Lula promises a new treaty of Itaipu beneficial to Brazil and Paraguay; he sees green hydrogen as a possibility

President Luiz Inácio Lula da Silva said this Thursday, in a speech at the inauguration ceremony of the new Brazilian general manager of Itaipu Binacional, that the new treaty with Paraguay for the hydroelectric plant will take into account Brazil’s responsibility as the largest country of South America in helping its neighbors grow.

“We will make a treaty that takes into account the reality of both countries and the respect that Brazil must have for its ally Paraguay,” Lula said.

“We will make a new treaty that will be very useful for maintaining the development of Paraguay, for the development of Brazil and for maintaining this cordial and harmonious relationship between the Brazilian people and the people of Paraguay.”

With the Itaipu construction debt being released this year, the governments of Brazil and Paraguay are expected to formally start negotiations to revise the so-called “Annex C” of the Itaipu Treaty, which establishes the financial basis of the energy tariff generated by the project .

Under current terms, each country is entitled to 50% of Itaipu’s energy. In the case of Brazil, it is marketed under a quota system to distributors in the South, Southeast and Midwest. Paraguay, on the other hand, gives part of its energy to Brazil, at a certain price, since it does not consume all that it is entitled to. These conditions are subject to review starting this year, with the repayment of the debt.

The authorities of both countries had already spoken about the matter in recent years. In the case of Brazil, the previous Itaipu administration presented six scenarios on which to base the discussions, ranging from keeping the conditions of Annex C exactly as they are today, to allowing Itaipu to trade energy in a free trading environment (FTA ).

Lula also said he will strengthen Mercosur to increase the regional bloc’s negotiating power.

“Brazil, as the big brother of the South American countries, must be responsible for making other countries grow together with us,” he said. “I return with the commitment to strengthen Mercosur, because it has already been demonstrated that together we have the strength to negotiate, separated we are very fragile, and that is why we must stand together”.

HYDROGEN

Lula also said he hopes to soon make it possible to produce green hydrogen from the hydroelectric plant’s tank water.

“When I see Itaipu pouring water I imagine how many dollars we are losing… Who knows in the very near future we will produce green hydrogen from this Itaipu water and make money on both sides,” the president said.

Green hydrogen is emerging as an important alternative fuel in the energy transition process and in the fight against climate change, as it has the potential to reduce the emission of polluting gases from various sectors. It is obtained from the electrolysis of water using electricity from renewable sources.

Brazil is seen as an important agent for the development of this market, as it has the advantage of having a renewable electricity matrix of over 80%.

Several companies have started projects in the area, mainly positioning themselves on the coast, in ports such as Pecém (CE) and Açu (RJ), targeting the green hydrogen export market to Europe. The most advanced project in Brazil belongs to chemical Unigel, whose plant under construction in Bahia should be operational at the end of this year.

Source: Terra

Rose

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