South Africa is harnessing its strategic advantages, with the help of 12.5 million euro in development funding, to produce and export green hydrogen (H2), which could see demand rising to 530 million tons globally by 2050.
Minister in the Presidency, Mondli Gungubele, addressing government and business delegates at a stakeholder engagement in the Northern Cape (NC), said on Monday that the country had several strong advantages to become a key global supplier of H2. The engagement was focused on a groundbreaking H2 production venture between national government, the Northern Cape provincial government and Sasol, in the planned new Boegoebaai Special Economic Zone (SEZ).
“The Presidency and the development agency GIZ, commissioned by the German Federal Ministry of Economic Cooperation (BMZ) and Development, have agreed to collaborate on green hydrogen and to jointly implement the project “Promoting the development of a green hydrogen economy for South Africa” (known as H2.SA) with Euro 12.5 million in funding support from BMZ,” he said.
H2.SA aims to:
• Support the development of a favourable strategic and regulatory framework for a green hydrogen economy in South Africa
• Coordinate the contributions of different government departments and stakeholders
• Enable the building of a green hydrogen export economy
• Enhance capacity and knowledge of South Africans in the green hydrogen and powerfuels sectors
• Mitigate potential implications of a green hydrogen and powerfuels economy on the environment, society, and the economy.
Gungubele said the country’s advantages for the production of H2 included its superior renewable energy endowment of both onshore wind and solar, which was the largest cost component in the production of green H2. The country also has the largest concentration of known platinum group metal reserves. Platinum is a major component in the manufacture of fuel cells and PEM electrolysers and 90% of known reserves are located in South Africa and Zimbabwe.
Other strategic advantages included:
- A deep expertise of the Fischer-Tropsch Process used to produce powerfuels such as diesel, petrol and kerosene (jet fuel);
- The availability of large tracts of relatively cheap land for RE production;
- A large electric grid for the wheeling of renewable energy
- A large domestic industrial base as a source of local demand.
“Green H2 is still an emerging sector but is one with significant potential. Global green H2 demand could reach 530 million tons by 2050, displacing roughly 10.4 billion barrels of oil equivalent, around 37% of pre-pandemic global oil production,” Gungubele said.
“The green H2 export market could be worth US$300 billion per annum by 2050,” he added.
However, H2’s export potential and its potential to decarbonise local industry has so far not yet been fully explored.
“While South Africa has a number of inherent advantages that would enable it to be a major player in the anticipated green hydrogen economy, we are behind the curve in announcing our intentions and appetite to the rest of the world, relative to our competitors such as Chile, Australia, North Africa and the Middle East,” Gungubele said.
“Over the past 12 months, Infrastructure South Africa (Isa) has been working with the NC and Gauteng provincial governments to develop catalytic green H2 projects that will underpin provincial green H2 strategies, with the NC being the production hub and Gauteng being the domestic demand hub. These projects and strategies, together with the Department of Science and Innovation's H2 Society Roadmap for South Africa, will be the foundation of a national green H2 strategy,” he said.
The NC and Gauteng have signed the following agreements:
• A Memorandum of Understanding between the NC and Sasol for Sasol to be the anchor developer of the planned Boegoebaai Green H2 SEZ;
• A Memorandum of Understanding between the NC and the Port of Rotterdam (PoR) for the PoR to act as a demand aggregator for green H2 into Europe
• A Memorandum of Understanding between Gauteng and Sasol for Sasol to develop green H2 production facilities in Gauteng aimed at decarbonising domestic industry.
Sasol is a major green H2 manufacturer producing approximately 2.4 million tons per annum for the domestic market.
“The production of green H2 provides Sasol with an opportunity to leverage its expertise to enter a new market through greenfield facilities like the planned Boegoebaai Green H2 SEZ adjacent to the planned Boegoebaai port,” he said.