Trade, industry & competition minister Ebrahim Patel says SA has the wherewithal to develop a thriving green hydrogen industry.
He briefed the trade, industry & competition committee on Friday on the green hydrogen commercialisation strategy, which was approved by cabinet in October.
Green hydrogen, which uses renewable energy to produce hydrogen from water through electrolysis, is seen as a key enabler for sectors of the economy such as steel to reduce emissions. Green hydrogen can also be used to produce green ammonia, which can be used as a fertiliser to reduce the carbon footprint of farming.
“SA is well positioned to produce green hydrogen thanks to its structural competitive advantages,” Patel said. These included renewable energy resources, expertise in the Fischer-Tropsch technology (which can produce liquid hydrocarbon fuels from syngas) and its endowment of platinum group metals, which are used in the electrolysers used in producing green hydrogen.
The minister said the commercialisation of green hydrogen would provide a pathway for the reindustrialisation of the economy, decarbonisation and social upliftment. It was critical, he said, that a fair proportion of climate finance was sourced to enable development of the industry.
Finance would have to be secured from various sources and in various forms including grants, concessional debt and contract for differences in the financial derivatives market.
Demand opportunities that existed in the local market were in the steel, fertiliser, aviation fuel and transport industries as well as the export market for ammonia, methanol and bunker fuel.
Growth of the green hydrogen sector would also promote industrialisation and local manufacturing, Patel said, for goods such as renewable energy components, fuel cells, electrolysers and balance of plant components, which are used in power plants.
Designated projects
The development of the green hydrogen sector had to be driven by an action plan and move with speed. National co-ordination, policy regulations, funding and skills development were required.
He said nine green hydrogen projects had been designated strategic integrated projects (SIPs) while 11 others are in the SIP prefeasability stage. In terms of the Infrastructure Development Act, the Presidential Infrastructure Co-ordinating Commission (PICC) designates SIPs, which have to be of significant economic or social importance to SA; contribute substantially to any national strategy or policy relating to infrastructure development; or be above a certain monetary value determined by the PICC.
Patel said that in 2023-25 the focus would be on road transport, primarily fuel cell vehicles, particularly heavy-duty vehicles. Pilot projects are already under way in this field.
In 2025-30 the focus would be on sectors such as non-ferrous metals, green steel and cement, which will need to decarbonise to remain globally competitive.
In 2028-30 green ammonia and methanol would replace current production from high carbon techniques. From 2030 attention would be given to sustainable aviation fuel and the use of hydrogen for storage.
President Cyril Ramaphosa, who delivered the keynote address at the SA Green Hydrogen Summit in October, said that green hydrogen would play a prominent role in the just transition as the country moves to reduce carbon emissions from its fossil-fuel powered energy and industrial sectors.
“A new green hydrogen economy could add an estimated 3.6% to SA’s GDP by 2050 and create, at a minimum, 370,000 jobs,” the president said then.
At the summit, SA entered into agreements with the aim of launching a SA-H2 fund aimed at facilitating the development of the country’s green hydrogen sector.
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