Brazilian steelmaker Gerdau S.A. had signed a two-year non-binding memorandum of understanding (MoU) with Petróleo Brasileiro S.A., a Brazilian state-owned energy company, to collaborate on developing low-carbon solutions.

Under the agreement, the parties planned to evaluate business opportunities and potential partnerships for decarbonization projects, low-carbon fuels, hydrogen and its by-products, carbon capture, utilization and storage (CCUS), and natural gas-based direct reduction steelmaking technology.

Gerdau aimed to reduce its carbon intensity from the current 0.91 tCO2e per ton of steel to 0.82 tCO2e per ton of steel by 2031.

Petróleo Brasileiro believed that this MoU was consistent with the company’s strategic guidelines, which included measures to decarbonize its operations and promote the energy transition.