Brookfield Eyes $15 Billion Investment In Green Steel

Brookfield Asset Management has disclosed plans to raise some $15 billion for a decarbonization push in the steelmaking industry using so-called green hydrogen.

The firm recently launched the Brookfield Global Transition Fund II, which will invest in technologies such as hydrogen produced via hydrolysis using wind and solar power, and carbon capture. It will also invest in more mature areas such as wind and solar, as well as batteries.

“What we like are real assets with strong, visible cashflows,” Brookfield’s managing partner of renewable energy and transition, Natalie Adomait, said, adding that green hydrogen production could fit in with these requirements.

“When we think about partnering with a steel company, for example, we would look at how we can help them by building a hydrogen electrolyzer that can be under a long-term off-take arrangement,” Adomait added.

Green hydrogen production involves splitting water molecules into their constituent atoms in an electrolyzer powered by a wind or solar farm.

Hydrogen is seen as particularly promising in the decarbonization of steelmaking, which relies heavily on coal to generate the energy necessary to produce steel. Hydrogen, according to proponents, could replace coal as fuel but the problem is that this replacement has never been tried at any meaningful scale. In addition to that, hydrogen production, especially green hydrogen production is still a very expensive endeavor.

According to Brookfield’s Adomait, partnering with the fund would help steelmakers make their product more competitive—presumably because of green hydrogen’s lower emission footprint—without requiring any upfront capital to do it.

In carbon capture, the asset manager’s focus seems again to be on steelmaking. Brookfield is looking to capture, store, and using carbon dioxide emitted from blast furnaces in the industry as part of its transition investment push.

Brookfield Asset Management has around $800 billion in assets under management.

By Irina Slav for Oilprice.com

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