South Africa

Country: South Africa

Document type: National Roadmap

Title: Hydrogen Society Roadmap for South Africa

Released: February 2022

Document type: National Strategy

Title: Green Hydrogen Commercialisation Strategy for South Africa

Final Report: November 2022, Cabinet Approved: October 2023

Hydrogen Society Roadmap

The roadmap is intended to serve as a national coordinating framework to facilitate the integration of hydrogen-related technologies in various sectors of the South African economy.

The roadmap includes six high level outcomes:

  • Decarbonisation of heavy-duty transport
  • Decarbonisation of energy-intensive industry (cement, steel, mining, refineries)
  • Enhanced and green power sector (main and micro-grids)
  • Centre of Excellence in Manufacturing for hydrogen products and fuel cell components
  • Creating an export market for South African green hydrogen; and
  • Increase the role of hydrogen in the South African energy system in line with the move towards a net-zero economy.

The roadmap identifies a total of 70 priority actions to be undertaken to support delivery of the roadmap.

Green Hydrogen Commercialisation Strategy

The longer term hydrogen project development pathway is presented in ten-year blocks:

  • Up to 2030 – pilot projects: 50-300,000 tonnes per annum hydrogen production, support development of 2 GW electrolyser capacity
  • 2030-2040 – maturing projects:  2-4 million tonnes per annum hydrogen production, support expansion of additional 25 GW electrolyser capacity
  • 2040-2050 – scale-up projects: 4-6 million tonnes hydrogen production per annum, support expansion of additional 17 GW electrolyser capacity (over 40 GW total capacity by 2050)

The successful implementation of the commercialisation strategy is dependent on the execution of six key elements:

  • Export prioritisation: target exports of green hydrogen and green chemicals utilising a suite of financial support mechanisms.
  • Domestic market stimulation: develop projects along the value chain to stimulate domestic demand; examples include green steel, hydrogen valley mobility programme and sustainable aviation fuel project.
  • Develop local industrial capability: support the domestic production of fuel cells, electrolysers, balance of plant equipment, etc.
  • Securing finance: secure funding from various sources and in various forms (e.g. grants, concessional debt, contracts for difference).
  • Proactive economic and socio-economic development: develop training and skills programmes, focus on decarbonising the hard-to-abate sectors, etc.
  • Government role in policy and regulatory support: position green hydrogen as a key contributor to decarbonisation, prioritise development of a national green hydrogen infrastructure plan, and drive the required policy and regulatory changes to support industry development.

Over the course of 2021, federal and provincial government and industry stakeholders worked to progress a series of agreements to support development of ‘catalytic’ green hydrogen projects in South Africa:

  • A Memorandum of Agreement (MoA) between the Northern Cape province and Sasol for Sasol to be the anchor developer of the planned Boegoebaai Green hydrogen SEZ
  • A MoA between the Northern Cape province and the Port of Rotterdam for the latter to act as a demand aggregator for green hydrogen into Europe; and
  • A MoA between Gauteng and Sasol for Sasol to develop green hydrogen production facilities in Gauteng aimed at decarbonising domestic industry.

In January 2022, it was announced that the South African and German Governments would collaborate on a project called ‘Promoting the development of a green hydrogen economy for South Africa (H2.SA)’ with the German Government providing €12.5 million in funding to support the project. The project aims to:

  • Support the development of a favourable strategic and regulatory framework for a green hydrogen economy in South Africa.
  • Coordinate the important contributions of different government departments and stakeholders for such a framework.
  • Enable relevant actors to build a green hydrogen export economy.
  • Enhance capacity and knowledge of South African stakeholders in the green hydrogen and Powerfuels sector; and
  • Mitigate potential implications of a green hydrogen and Powerfuels economy on the environment, society, and the economy.

In June 2023, the governments of the Netherlands, Denmark and South Africa concluded a Heads of Agreement with the intention to launch a new ‘SA-H2 Fund’. The SA-H2 fund would be a blended finance fund; Its focus would be to fast-track the mobilisation of funding towards the development and construction of large-scale green hydrogen infrastructure assets across South Africa. The SA-H2 Fund initiative would aim to secure US$1 billion in funding.

In October 2023, the South African Government News Agency noted that Cabinet has given the Green Hydrogen Commercialisation Strategy (GHCS) the green light for implementation. The Agency quoted the Minister in the Presidency, Khumbudzo Ntshavheni, as noting that the Government had identified possible funding for green hydrogen projects and the draft Green Paper had received extensive feedback from stakeholders.

In September 2024, the EU announced support to Namibian and South African green hydrogen investment funds, totalling €50 million with investment especially targeting private sector projects across the hydrogen value chain, such as the production, transportation and storage, as well as downstream industries.

 

Reviewed: November 2024