EMERSON SOUZA, Vice President of Institutional Relations at Brazil Iron; and ROB DAVIES, CTO of Brazil Iron.

The global race for sustainability is accelerating. For industries such as automotive and steelmaking, which form the backbone of modern economies, the challenge lies in delivering real, measurable change—going beyond promises.

Brazil has a genuine opportunity to lead this transition. The question is whether the country will seize it.

When we talk about decarbonizing transportation, the electric vehicle is often the first image that comes to mind. Electrification is indeed essential—that is unquestionable. However, to achieve true sustainability in cars, buses, and trucks, the transformation must begin at the very start of the supply chain, with the steel that makes up most of the vehicle itself.

According to the International Council on Clean Transportation (ICCT), steel and iron account for up to 66% of a car’s weight. Today, steel production is responsible for about 8% of global CO₂ emissions. In short, electric vehicles will only be truly “green” once the steel they are built with is also produced by non-polluting means.

Here, a powerful analogy becomes clear. Just as electric vehicles replace internal combustion engines, electric arc furnaces (EAFs) powered by renewable energy are replacing coal-fired blast furnaces. Electrification is transforming not only the vehicle fleets on roads but also the steel mills that supply them. Electrifying both fleets and furnaces has an even greater impact.

Electric vehicles reduce emissions once they are on the road, while low-carbon steel reduces embedded emissions before the vehicles even leave the factory. The solution lies in green iron—technically known as HBI (Hot Briquetted Iron).

Produced from high-quality iron ore using renewable energy, HBI is the ideal raw material to feed electric furnaces. Combined, the two can cut steel production emissions by up to 95%.

For the automotive industry, this could mean vehicle manufacturing emissions falling by up to 27%. And the cost? According to the ICCT, the price of a car built with green steel would rise by less than 1%—a marginal cost for a transformative gain.

Global policy is accelerating this shift. Starting in January 2026, Europe’s Carbon Border Adjustment Mechanism (CBAM) will impose tariffs on carbon-intensive imports, leveling the playing field for low-carbon steel. Japan has already introduced subsidies of US$ 380 per ton to accelerate the transition from blast-furnace to green steel production. The direction is clear.

Brazil is ideally positioned to lead. Vale, for instance, has been seeking partners to enable the construction of Mega Hubs in the country to support HBI production.

In the state of Bahia, a megaproject is currently undergoing environmental licensing, with production expected to begin in 2030. Even before operations start, 10-year supply agreements have already been secured with top-tier partners, with potential revenues exceeding US$ 30 billion.

Unlike in Australia, where major projects remain stalled, Brazil enjoys a unique competitive advantage. The country combines an abundance of renewable energy with high-quality soft itabirite ore, found in only 3% of global reserves. This rare combination—world-class ore and unlimited clean energy—makes large-scale green iron production both viable and globally competitive.

The legacy Brazil can build is clear. Not merely as a bulk exporter of raw commodities, but as a global center for high-value, low-carbon industrial inputs that power the decarbonization of transport and steel. The world is electrifying—on the road and in the furnace. Brazil must seize this opportunity to lead the transformation.

Source: A indústria de base do Brasil é o motor da mobilidade sustentável global