Germany is planning to boost cooperation with Brazil on green hydrogen during German Economy Minister Habeck’s South America trip. Habeck will be accompanied by a number of industry executives looking to make new deals with the South American nations, which could help reach Germany reach its climate targets. German industrial giant Thyssenkrupp’s green hydrogen subsidiary Nucera will build a production facility for green hydrogen in the state of Bahia together with Brazilian chemical company Unigel. Brazil’s largest producer of nitrogen is investing $120 million to build electrolysis capacity of several hundred megawatts.

“Only through industrial-scale production with robust, reliable and cost-effective technologies at competitive renewable energy prices will green hydrogen be market-ready for widespread use,” Nucera chief Ponikwar said in a statement.

The green hydrogen and ammonia are set to be sold to steelmakers, refineries or used as synthetic fuel.

Separately, software giant SAP and the state-funded German Society for International Cooperation, or GIZ, plan to team up in Brazil to develop applications that make production of green hydrogen traceable through digital certificates.

Brazil has a huge renewable potential and the country generates almost 85% of its electricity through renewable sources, which makes South America’s largest economy an attractive partner for Germany to pursue its ambitious climate goals. After Russia’s invasion of Ukraine, Germany accelerated efforts to boost renewable energy to become less dependent on fossil fuel imports.

Habeck and Agriculture Minister Özdemir, who is also part of the trip, are trying to attract new trading partners during their visit.

The two ministers are being accompanied by a German business delegation that includes several medium-sized companies from sectors including mechanical engineering, solar technology, waste management and start-ups, in addition to German heavyweights like Thyssenkrupp, SAP and Volkswagen.

“We need to build a green bridge across the Atlantic,” Habeck said Monday in Belo Horizonte and urged stronger cooperation.

Habeck told reporters he sees a “window of opportunity” for working on a free trade agreement with Brazil on European level, which was halted under former Brazilian President Bolsonaro. The new head of government, Lula has spoken out in favor of concluding it as quickly as possible.