African Reserves

South Africa: Green Hydrogen Policy – A Rapidly Growing Timeline of Important Developments

In short

As an essential component of South Africa‘s energy transition, the production, transport, storage and use of green hydrogen have been the subject of numerous policy updates and commitments from the public and private sectors. in the country, especially in the past year. The schedule of developments is not expected to slow down as South Africa focuses on solutions to its energy crisis that also enable it to tackle climate change and meet its decarbonization goals.

In depth

1. The global commitment to decarbonize South Africa

Green hydrogen is essential in South Africa’s new energy mix due to its important role in tackling climate change and meeting decarbonisation targets. Over the past year, several substantial developments regarding South Africa’s green hydrogen policy and public and private sector commitments have been announced. The last big announcement came in early November 2021, when South African President Cyril Ramaphosa confirmed that South Africa had secured an $ 8.5 billion pledge from the US, UK, France. , Germany and the European Union, to be used to accelerate the country’s transition to a green economy, with particular emphasis on phasing out coal. This commitment, which was agreed at the United Nations Climate Change Conference (COP26) in Glasgow, will also support investments in the production of green hydrogen.

2. Recent significant developments in the hydrogen journey in South Africa

The announcement follows confirmation by Deputy Minister of Trade, Industry and Competition, Fikile Majola, in October 2021 that his ministry was reviewing its critical infrastructure program, with a view to help reduce some of the infrastructure costs associated with hydrogen production, refueling and transportation facilities. The Deputy Minister was speaking at a hydrogen webinar titled “Hydrogen Economy – An Opportunity for South Africa to Create an Inclusive Energy Sector with Important Black Participation”.

Earlier in October 2021, the South African government and private sector partners released a feasibility study, which identified three green hydrogen centers in the east of the country that had the potential to form a hydrogen valley. . The study also identified nine pilot projects in the mobility, industrial and buildings sectors, and examined opportunities for exporting green hydrogen. To export green hydrogen, South Africa needs to develop the infrastructure to store and transport green hydrogen or green ammonia.

The study came a few weeks after the government approved the development of the hydrogen society roadmap on September 14, 2021. The roadmap is intended to prepare the country for a hydrogen economy and is developed by the Department of Science and Innovation, Hydrogen South Africa. (HySA), government and industry stakeholders. It focuses on national ambitions, the prioritization of sectors, the overall policy framework and the macroeconomic impact of the hydrogen economy across South Africa. The government’s release of the Hydrogen Society’s roadmap will hopefully take place before the end of 2021.

A few months earlier, in July 2021, Sasol Limited and the Industrial Development Corporation (IDC) entered into a memorandum of cooperation to jointly develop and shape an enabling environment for the promotion of the green hydrogen economy in South Africa. As part of the memorandum, the parties said they will work together to advocate for favorable policy frameworks, develop pilot and commercial hydrogen projects, access local and international financing options and pursue strategic projects that benefit to the country’s energy transition and economic development objectives. At the Africa Green Hydrogen Forum, held in November 2021, Sasol announced its intention to start producing green hydrogen by 2023.

In June 2021, the “Super H2igh Road Scenario for South Africa” report was published, which showed how green hydrogen can lead to a win / win situation for South African jobs and their decarbonization goals. The study, which was commissioned by the German green energy think tank, Agora Energiewende, highlighted South Africa’s potential to become a key exporter of green hydrogen and reduce its gas emissions. greenhouse effect of 70%, if it were to capitalize on the opportunities presented by the hydrogen economy. A month earlier, the German development bank KfW launched a € 200 million program to support the implementation of green hydrogen projects in South Africa. The Council for Scientific and Industrial Research (CSIR) and Meridian Economics have been appointed by KfW to help it identify and assess projects with high potential for implementation.

In April 2021, the Department of Trade, Industry and Competition described the steps it had taken so far to support the development of the green hydrogen economy in South Africa. These included mandating the IDC to be the champion of commercialization of the South African hydrogen economy, partnering with the private sector to finance opportunities along the entire value chain of hydrogen. hydrogen and the start of local production of fuel cells. The announcements were made by the Minister of Trade, Industry and Competition, Ebrahim Patel, during a webinar entitled “Renewable Hydrogen and Green Fuels”.

An earlier report, this one focusing on electric fuels and green hydrogen, was released by CSIR in February 2021. The report confirmed South Africa’s advantage in the production and export of green hydrogen due to its wind and solar resources and its vast platinum group metals (PGMs) reserves. South Africa holds 75% of the world’s platinum reserves and is the world’s largest producer of PGM. PGMs can act as catalysts during the electrolysis process which converts water into hydrogen and oxygen. As such, a carbonless hydrogen solution is one of the major evolving end uses of PGMs. Also in February this year, President Ramaphosa announced the government’s plan to create a platinum valley, bringing together various applications of hydrogen to form an integrated hydrogen ecosystem.

3. HySa (Hydrogen South Africa) – how it all started

South Africa has considered hydrogen as an alternative clean energy source for some time. Hydrogen South Africa or HySA was officially launched in 2008 by the then Ministry of Science, Technology and Innovation (now the Ministry of Science and Innovation). Its objective was to develop the hydrogen economy with a particular focus on the aspiration of MGP. Ten years later, on December 4, 2018, the Department of Science and Innovation and the South African Agency for the Advancement of Science and Technology (SAASTA) hosted the 30th Meetings of the Partnerships Steering Committee for Hydrogen and Fuel Cells in the Economy (IPHE) and a year later, in 2019, the HySA Infrastructure team was commissioned to conduct a study to determine the costs of transporting hydrogen by rail. land and sea, including shipping to Japan.

4. What to expect next

A report by Baker McKenzie – Shaping Tomorrow’s Global Hydrogen Market (report), highlighted how, in just a few decades, all of the world’s energy needs, including electricity, industry, transport, buildings and agriculture, will need to come from carbon-free sources. This will require huge changes in just over a generation and will require innovative solutions, technologies and policies. The report shows that hydrogen will play a crucial role in this fundamental change in the planet’s energy systems.

The past year has been an important one for the green hydrogen industry in South Africa and the pace of developments in government policy, research, plans and public and private sector commitments has increased dramatically. The green hydrogen sector is key to South Africa’s just energy transition, and further developments that underscore the country’s willingness to start taking full advantage of its hydrogen energy potential are to be expected. .

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