Hydrogen is an important feedstock in manufacturing processes ranging from steel, ammonia and fuel production to energy generation and storage. Traditional hydrogen processes generate large amounts of carbon, but green hydrogen (GH2) has emerged as an important contribution in the global shift towards sustainable energy. It is produced through the electrolysis of water, using renewable energy sources such as wind and solar power. The process splits water molecules into hydrogen and oxygen, resulting in a clean fuel that produces only water vapour on combustion.
Greening of heavy industries
Green hydrogen has potential in many sectors that are difficult to electrify, such as steel, chemicals, aviation, fertiliser, shipping, long-haul truck transport, and other heavy industries that have massive carbon emissions. It can also act as a storage medium for renewable energy, alleviating the problem of variable supply associated with solar and wind power. In the form of green ammonia it can be transported more effectively. By contributing to the decarbonisation of these sectors, green hydrogen can play a crucial role in achieving the global climate goals set by the 2015 Paris Agreement. The development of green hydrogen industries can also boost economic growth, create jobs, and stimulate innovation.
Globally important
As a result, it is becoming an important part of the international drive to decarbonise and reach net-zero targets. Here are some numbers. The EU aims to use 20 million tons of clean hydrogen by 2030, as part of its effort to cut greenhouse gas emissions by 55%. The US estimates that replacing fossil fuels with clean hydrogen could reduce overall emissions by 10% by 2050; and the Hydrogen Council says that hydrogen could meet 18% of global energy demand by 2050.
Significant investment is being made in green hydrogen production facilities, infrastructure and research. The number of clean hydrogen projects announced worldwide is rising steadily, with more than 1400 new production projects announced between 2020 and 2023. The market is experiencing rapid growth, driven by these global efforts to reduce carbon emissions, and by advances in renewables and electrolysis technologies. This growth is being supported by government policies and investments worldwide.
South Africa’s green hydrogen potential
South Africa is well positioned to become a major player in the green hydrogen market. Among its many advantages are abundant and cost-effective solar and wind resources; availability of land for renewable energy facilities; significant platinum group metal resources, which could be leveraged for the production and processing of materials needed for electrolysers and fuel cells; a sophisticated chemical industry, with extensive industrial experience in processing of synthetic fuels and ammonia production; experience with coastal desalination projects; well-developed port infrastructure; and strategic shipping routes to growing international markets.
The government has embraced the hydrogen economy, approving the Green Hydrogen Commercialisation Strategy, which aims to position the country as a leading green hydrogen producer and exporter. It intends to capture 4% of the global green hydrogen market share by 2050, with plans to produce up to 13 million tons of green hydrogen annually by that year. This is projected to contribute up to 3,6% to South Africa’s GDP by 2050, and create approximately 37 000 jobs.
This has attracted international interest and investment, and collaboration with countries like Germany, Japan and the Netherlands are providing access to advanced technologies, funding and market opportunities. Substantial investments are being mobilised through initiatives like the SA-H2 Fund, which aims to attract $1 billion and a R300 billion investment pipeline under the Green Hydrogen National Programme.
There is a whole pipeline of hydrogen projects that are on the way, and have been registered as Strategic Integrated Projects (SIPs). These are projects of economic or social importance to the country, and receive accelerated approval and shorter delivery timeframes. There are about 20 projects linked to green hydrogen across the country. Nine have been published in the Government Gazette as priority areas for government, in partnership with business and other sectors.
A range of business opportunities have also been identified for further exploration. They include manufacturing electrolysers and fuel cells, developing and operating renewable energy infrastructure, energy storage, desalination plant development, and green hydrogen beneficiation and storage. With major automotive manufacturers present in the country, South Africa could even become a hub for hydrogen fuel cell vehicle production.
Major green hydrogen projects
These are some of the green hydrogen projects that are underway, both large and small.
Coega hydrogen development: Hive Hydrogen’s green ammonia plant at the Coega Industrial Development Zone aims to produce over one million tons of ammonia annually by 2029, supported by a 3,7 GW renewable energy capacity in its first phase. Hive Hydrogen, says the site for the plant is at the Coega deep-water harbour, which has liquid bulk berth capacity, liquid bulk storage, large-scale onsite power generation, unlimited water availability, and large-capacity grid connections for power wheeling. Construction on the first phase will start in 2026. There are substantial spinoffs in job creation, and upstream and downstream economic opportunities. The project is underpinned by a gigascale 1,2 GW cluster of nine solar projects in De Aar, the Crossroads Green Energy cluster.
Boegoebaai: Another notable project is the Boegoebaai Green Hydrogen Project in the Northern Cape. This is a collaboration between Sasol and the Northern Cape Development Agency. It aims to develop a green hydrogen and derivatives hub at a new port, starting with a 1,2 GW electrolyser capacity to be completed by 2028, scaling up to 5 GW by 2035, and potentially reaching 20 GW by 2050. The site has favourable conditions for developing a vertical hydrogen value chain, including domestic production of photovoltaic modules and electrolysers.
Freeport Saldanha IDZ, Vanderbijlpark: A partnership between Sasol and ArcelorMittal, this project aims to develop carbon capture technology for sustainable fuels and chemicals production, and green steel production through green hydrogen at Saldanha Bay. It has been granted SIP status and is expected to start production and export in early 2026, creating significant employment opportunities in the region. By 2027, the facility could start producing green direct reduced iron (DRI) for the European steelmaking market.
Sasolburg Green Hydrogen Production Hub: Sasol has already produced its first green hydrogen at this pilot facility, which is expected to produce up to 5 tons of green hydrogen daily using electricity from renewable sources. The 69 MW Msenge Emoyeni Wind Farm in the Eastern Cape is supplying electricity to the project via a wheeling agreement. The green hydrogen produced will be used in mobility applications.
Separately, Sasol has a joint venture in Secunda for hydrogen-based aviation fuel. The HySHiFT project is being pursued in partnership with Linde, ENERGTRAG and Hydregen, and has been short-listed to bid for an offtake agreement under Germany’s H2Global platform.
The Hydrogen Valley Initiative: Led by Angloplatinum, Bambili Energy and ENGIE in partnership with the Department of Science and Innovation, the Hydrogen Valley Initiative aims to create a hydrogen corridor stretching from Limpopo to KwaZulu-Natal. This focuses on developing green hydrogen production facilities, refuelling stations and applications in mining, transportation and industrial sectors. “The hydrogen economy unpacks fantastic value for South Africa and for us as PGM miners, with platinum and iridium used both in the generation of green hydrogen and in downstream opportunities like PEM electrolysers and hydrogen cars,” said Anglo executive head of projects and environment, Prakashim Moodlia.
Angloplatinum has also brought hydrogen powered solutions to its mines with the introduction of the world’s largest hydrogen-powered mine haul truck at Mogalakwena PGM mine in Limpopo.
Prieska Power Reserve Project: This is another significant green hydrogen initiative, developed by the Australian company, HDF Energy. The initiative plans to create a hybrid power plant, set to begin producing green hydrogen and ammonia in 2026.
Challenges and barriers
While South Africa’s green hydrogen projects hold great promise, they also face challenges that need to be addressed. The development of infrastructure, including electrolysis plants, storage facilities and distribution networks, requires massive investment. Currently, the production of green hydrogen is expensive, becasue of the high costs of renewable energy and electrolysis technology. Achieving cost competitiveness will require continued advancements in technology, economies of scale, and government support.
Also needed is a skilled workforce with expertise in renewable energy, electrolysis and hydrogen technologies. Investing in education and training programmes is also essential to build the necessary human capital.
Future prospects and opportunities
The global clean hydrogen market holds immense potential for decarbonising difficult heavy industrial sectors and reducing greenhouse gas emissions. Once the barriers are addressed and collective action is taken, the market should grow rapidly, contributing to a low-carbon economy and helping achieve climate targets.
Despite the challenges, the future of green hydrogen in South Africa also looks promising. We are in an unprecedented position to take part in the global hydrogen economy, and our green hydrogen projects are a significant step towards that goal. While challenges remain, supportive policies, a clear hydrogen strategy, and international partnerships can pave the way for the successful implementation of these initiatives. The opportunities are great, and the time for action is now.
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