Minister in the Presidency Mondli Gungubele joined a delegation from the Northern Cape provincial government, Sasol and Infrastructure South Africa for a stakeholders engagement and site visit to Boegebaai in Port Nolloth on Monday.
MINISTER in the Presidency Mondli Gungubele joined a delegation from the Northern Cape provincial government, Sasol and Infrastructure South Africa for a stakeholders engagement and site visit to Boegebaai in Port Nolloth on Monday.
The engagement follows the Sustainable Infrastructure Development Symposium South Africa (SIDSSA) held in October 2021, where green hydrogen was identified as a “big frontier” that represents both future and current growth and investment opportunities for the Northern Cape and South Africa.
The engagement served as an important interaction between government and Sasol to implement the memorandum of agreement (MOU) signed and announced at SIDSSA 2021.
The demand for green hydrogen and green hydrogen-based products such as ammonia and synthetic jet fuels has been experiencing a rise globally.
This is off the back of national and corporate net-zero commitments aimed at keeping global warming below 2 degrees Celsius above pre-industrial levels.
Due to the multi-sectoral implications of green hydrogen, the Presidency plays a convening and co-ordinating role across government with respect to green hydrogen.
It was through co-ordination in the Presidency that Sasol, the Northern Cape provincial government and the Gauteng provincial government launched several agreements at SIDSSA 2021 that underpin their green hydrogen ambitions. The agreements are:
A memorandum of agreement between the NCPG and Sasol, for Sasol to be the anchor developer of the planned Boegoebaai Green Hydrogen Special Economic Zone pending a detailed feasibility study;
A heads of agreement between the NCPG and the Port of Rotterdam (PoR) for the PoR to act as a demand aggregator for green hydrogen into Europe; and
A memorandum of agreement between GPG and Sasol for Sasol to develop green hydrogen production facilities in Gauteng aimed at decarbonising domestic industry.
Minister Gungubele on Monday expressed excitement and lauded the Green Hydrogen Project as ground-breaking.
He said the project has the potential to bring much needed economic growth and investment to South African shores through the production of green hydrogen (H2).
Gungubele pointed out that Green Hydrogen Project is not only potentially catalytic for the Northern Cape, but for South Africa as a whole.
“This project is a testament to our constitutional imperative of partnership and participation as a young democracy,” said Gungubele. “It represents a real re-industrialisation vector and a potential enabler of mineral beneficiation by coupling our mineral resource endowment with green energy.
“South Africa has a long history investigating green hydrogen. Since 2007, the Department of Science and Innovation (DSI) has been researching green hydrogen with a focus on green mobility and the use of platinum group metals.
“Over the past two years, there has been a proliferation of net-zero commitments by nations and corporations. This has brought into renewed focus a need to decarbonise traditionally ‘hard-to-abate’ sectors such as heavy-duty transport, aviation, maritime, and heavy industries like steel, cement and ammonia manufacturing.
“These hard-to-abate sectors cannot be decarbonised through renewable energy (RE) and electrification or through RE and battery storage. Green H2 provides the best, long-term, opportunity to decarbonise hard-to-abate sectors as its use is free of emissions,” said Gungubele.
He added that the Department of Trade, Industry and Competition is developing a hydrogen commercialisation strategy; and that the Northern Cape and Gauteng provinces are developing provincial green hydrogen strategies focused on exports and domestic decarbonisation respectively.
“South Africa has a number of strategic advantages which could make it a globally competitive green H2 production area.
“The advantages include a superior RE endowment of both onshore wind and solar. Of which RE is the largest cost component in the production of green H2.
“It has the advantage of holding 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 in South Africa and Zimbabwe.
“It has a deep expertise of the Fischer-Tropsch Process used to produce power-fuels such as diesel, petrol and kerosene (jet fuel).
“It carries the availability of large tracts of relatively cheap land for RE production.
“It also has a large electric grid for the wheeling of RE; and a large domestic industrial base as a source of local demand.”
Gungubele explained that green H2 is still an emerging sector with significant potential.
He said 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.)
“The green H2 export market could be worth $300 billion per annum by 2050. Green H2’s export potential and its potential to decarbonise local industry have so far not yet been fully explored by South Africa.
“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.”
According to the minister, Infrastructure South Africa (ISA) has been working with the Northern Cape and Gauteng provincial governments to develop catalytic green H2 projects that will underpin provincial green H2 strategies, with the Northern Cape being the production hub and Gauteng being the domestic demand hub.
This has been developing over the past 12 months, he said.
These projects and strategies together with the DSI’s H2 Society Roadmap for South Africa will be the foundation of a national green H2 strategy.
“Sasol is a major grey 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 green-field facilities like the planned Boegoebaai Green H2 SEZ adjacent to the planned Boegoebaai port, which we are inspecting today.
“The German government through its H2Global initiative has created a sustainable aviation fuel market trading platform which is intended to provide funding to green hydrogen products globally. South Africa has the potential to become a global sustainable aviation fuel (SAF) hub due to our renewable endowment and Fisher-Tropsch technology capabilities.
“Sasol is working with a number of local and international partners on a pioneering sustainable aviation fuel project at the Sasol Secunda facility.”
“This project has been assessed by the Investment and Infrastructure Office in the Presidency and was found to have the potential to contribute to a just transition of South African workers and communities from coal through creating quality, green jobs.
The re-positioning of Sasol’s infrastructure away from fossil fuels has the potential to promote and sustain employment, livelihoods and economic inclusion for historically marginalised communities and sectors of our society while positively contributing to domestic and international net-zero commitments.
“Due to its catalytic nature and its potential to contribute to a just transition, the Investment and Infrastructure Office submitted a letter of support to H2Global for the Sasol Consortium’s SAF project.”
Gungubele said the Presidency and GIZ, commissioned by the German Federal Ministry of Economic Cooperation and Development, (BMZ), have agreed to collaborate on the topic of green hydrogen and to thus jointly implement the project “Promoting the development of a green hydrogen economy for South Africa”, abbreviated as H2.SA, with 12.5 million euro funding support from BMZ.
He said that the Investment and Infrastructure Office is in the process of developing South Africa’s inaugural Country Investment Strategy (CIS) which should be released for public comment before the end of the first quarter of this calendar year.
“The CIS aims to position South Africa as a key preferred African investment destination by attracting and facilitating quality Foreign and Domestic Direct Investment into the country, in a well-co-ordinated manner, anchored by quality institutions and robust economic infrastructure networks.
“This is in the country’s important endeavour of advancing its National Development Plan (NDP) target of 30 percent of gross fixed capital formation (GFCF) to gross domestic product (GDP) by 2030.