The global race for sustainability is accelerating. For industries such as automotive and steelmaking, which are the backbone of modern economies, the challenge is to deliver 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 talking about decarbonizing transportation, the first image that often comes to mind is that of an electric vehicle. Electrification is indeed essential; that is beyond question. However, to achieve true sustainability in cars, buses, and trucks, the transformation must begin at the very start of the 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 around 8% of global CO₂ emissions. In short, electric vehicles will only be truly “green” when the steel they are made from is produced through non-polluting means.

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

Electric vehicles reduce emissions once they are on the road, while low-carbon steel reduces embedded emissions before the vehicle even leaves the factory. The solution is 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. Together, they can cut steel production emissions by up to 95%.

For the automotive industry, this means vehicle production emissions could fall by up to 27%. And the cost? According to the ICCT, the final price of a car built with green steel would increase by less than 1%—a marginal cost for a transformational benefit.

Global policy is reinforcing this change. 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 furnaces to green steel. The direction of travel is clear.

Brazil is in an ideal position to lead. Vale, for instance, has been seeking partners to enable the construction of Mega Hubs in the country to supply HBI production.

In the state of Bahia, a mega project is undergoing environmental licensing, with production expected to begin in 2030. Even before operations start, ten-year supply agreements have already been secured with leading partners, with the potential to generate around US$ 30 billion in revenue.

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

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

(*) By Emerson Souza and Rob Davies, Vice President of Institutional Relations and CTO at Brazil Iron, respectively.
Source: A indústria de base do Brasil é o motor da mobilidade sustentável global