What is green hydrogen?

Hydrogen (H2) is a chemical element with an atom that consists of only one proton and one electron. At room temperature and atmospheric pressure, it is a colourless, odourless, tasteless, non-toxic and highly combustible gas. Hydrogen is used as a raw material and fuel in a number of industrial processes, and although it is the most abundant element on earth, it is produced through different methods for use. It burns without emitting greenhouse gases, with water being the only product. Green hydrogen is hydrogen that is produced through electrolysis of water, where the electricity used during production comes from renewable sources such as solar and wind power. Green hydrogen therefore offers the possibility of replacing fossil fuels with a zero net emissions fuel. 

What is happening around green hydrogen?

The development of a green hydrogen sector has become a priority in South Africa over the last few years. The government has made several pronouncements and policy decisions and interventions that made this clear. Businesses have taken certain initiatives to develop green hydrogen projects. Some highlights of these government and business activities include:

• In 2021 the Department of Science and Innovation released a Hydrogen Society Roadmap For South Africa that envisaged an electrolysis capacity of at least 15 GW by 2040.

• In the same year, the South Africa Hydrogen Valley feasibility report estimated that demand for hydrogen in the Valley that includes the Bushveld complex and the broader region around Johannesburg, Mogalakwena and Durban, could reach up to 185 kt H2 by 2030.

• In 2022 and 2023 the Presidency hosted high profile Green Hydrogen Summits with the aim of establishing South Africa as the destination of choice for investment in green hydrogen projects.

• In 2022, mining group Anglo American unveiled a prototype of the world’s largest hydrogen-powered mine haul truck, which they envisaged replacing their entire diesel-powered fleet by 2040.

• Hive Energy is undertaking the development of a R75-billion green ammonia export plant in the Coega Industrial Development Zone in Gqeberha in the Eastern Cape.

These are only some of the things happening in the green hydrogen sector that indicate the developments driving the palpable excitement around the country and beyond.

What are the expected benefits of the green hydrogen economy?

The expected benefits of the green hydrogen economy is often associated with decarbonisation, re-industrialisation and social upliftment.^[1] Let us look at each in turn.

Decarbonisation

Green hydrogen has a crucial role to play in the drive to achieve global net zero emissions by 2050. The Green Hydrogen Commercialisation Strategy for South Africa states: ‘The need for transportable and tradable green energy molecules is a critical part of satisfying future global energy demand as well as decarbonising hard to abate industries and is driving the growth of a new global energy market for Green Hydrogen (GH).’^[2]

Hard to abate sectors include iron, steel, cement and building materials production; aviation and shipping; and steelmaking and the production of certain chemicals. Fossil fuels cannot be easily replaced by renewable energy in these sectors. Green hydrogen offers a workable, possible replacement with net zero emissions.

Re-industrialisation

In addition to replacing fossil fuels in the above-mentioned sectors, green hydrogen can contribute to the revitalisation of some industries and the development of new ones. Examples are non-ferrous metals, green steel, cement and petrochemical industries.^[3] The commercialisation strategy estimated that investment of between 1.1 and 13 billion dollars is needed to support the planned green hydrogen projects to be commissioned in 2025. Some media outlets report that the green hydrogen sector has the potential to create more than 30000 jobs by 2040.

Social upliftment

In addition to job creation, the green hydrogen sector is expected to contribute to social upliftment in at least two more ways. The first is through its contribution to community development, about which more is said below. The second is through producing more electricity and potable water than is needed for hydrogen production, which is then made available for public consumption in a water and electricity constrained country. Potable water is to be produced through desalination of seawater, and electricity through renewable sources such as wind and solar power.

Constraints and challenges

Most of the constraints and challenges facing green hydrogen has to do with the fact that it is an emerging sector. Some of these include:

• The sector requires large-scale investment with long periods projected for returns. South Africa is just one of possible destinations for investment and needs to use its natural and economic advantages to be competitive.
• The commercial viability of the sector depends on long-term investment and the creation of appropriate infrastructure and policies.
• The socio-economic benefits of green hydrogen tend to be vague at this point.
• Green hydrogen uses potable water and electricity as inputs and understandable concerns around this need to be addressed.
• There are concerns that the green hydrogen sector will reproduce and strengthen wealth and income inequalities in South Africa. 

Community development and the green hydrogen sector

Green hydrogen companies, financing institutions and regulatory bodies have all included community development as an essential element in the development of the sector. In 2023 the GIZ (German Development Cooperation) published a ‘Green Hydrogen Community Development Toolkit’ intended to support project developers in the sector. Few industries have started systematic community development work so early in their development and this will be a key area for this platform to monitor and track.

Key documents and statements

Here are some of the key documents related to the green hydrogen sector in South Africa:

• The Hydrogen society roadmap for South Africa 2021 was published by the Department of Science and Innovation with the aim ‘bringing together a variety of stakeholders and institutions (both public and private) around a common vision on how to use and deploy hydrogen and hydrogen related technologies as part of our economic development and greening objective.’
• The GREEN HYDROGEN COMMERCIALISATION STRATEGY FOR SOUTH AFRICA was published in November 2022 by the Department of Trade, Industry and Commerce. Its main purpose was to outline, based on thorough research and engagements, ‘opportunities and benefits that can be derived [from green hydrogen] for South Africa and suggest options and focused actions.
• In 2021 the South Africa Hydrogen Valley Final Report was published by the Department of Science and Innovation in partnership with Anglo American Platinum, Bambili Energy, and ENGIE. The report looked ‘into opportunities to transform the Bushveld complex and larger region around Johannesburg, Mogalakwena and Durban into a Hydrogen Valley.
•  In 2023 the GIZ South Africa (German Development Cooperation) in partnership with Infrastructure South Africa published a ‘Green Hydrogen Community Development Toolkit’ intended to support project developers in the sector.