South Africa

Currently, the demand for hydrogen and green hydrogen in South Africa is relatively low compared to other countries, but there are efforts to increase the use of hydrogen in various sectors.

According to a report by the International Energy Agency, South Africa's total hydrogen demand was approximately 0.5 MTPA in 2019, with most of this demand coming from the oil refining and chemical industries. However, the report also notes that there is potential for increased demand for hydrogen in the transport sector as well as in power generation. South Africa has significant potential for producing green hydrogen using renewable energy sources such as wind and solar power. According to the Hydrogen Society Roadmap, the country could produce up to 3.9 million tonnes of green hydrogen per year by 2050.

South Africa currently produces hydrogen mainly from fossil fuels, primarily through the steam methane reforming process. According to the South African National Energy Development Institute, the country produced approximately 450,000 tonnes of hydrogen in 2018, with most of this used for industrial processes.

South Africa has a small but growing market for hydrogen fuel cell vehicles. According to the Department of Trade, Industry and Competition, there were approximately 30 hydrogen fuel cell vehicles registered in the country as of 2020, and there are plans to increase this number in the coming years.

Overall, while the demand for hydrogen and green hydrogen in South Africa is currently relatively low, there is potential for increased use of hydrogen in various sectors, particularly in transport and power generation. The country's abundant renewable energy resources and existing expertise in related industries make it well-positioned to become a leader in the development of green hydrogen technologies.

The South African government has developed policies and initiatives to promote the development of a hydrogen and green hydrogen economy. Here are some key policies related to hydrogen and green hydrogen in South Africa:

1. Hydrogen Society Roadmap: In 2019, the South African government released the Hydrogen Society Roadmap, which outlines a plan for developing a hydrogen economy in the country. The roadmap includes targets for increasing the use of hydrogen in transport, industry, and power generation, and identifies key priorities for research, development, and investment. South Africa aims to deploy 10 GW of electrolysis capacity in Northern Cap by 2030 and produce about 500 kilotons of hydrogen annually by 2030. This growth is forecasted to create 20,000 jobs annually by 2030 and 30,000 by 2040.
2. Renewable Energy Independent Power Producer Procurement Program (REIPPPP): The South African government has established the REIPPPP, which is a competitive tendering process for the procurement of renewable energy projects, including those related to hydrogen and fuel cells. The program aims to promote the development of renewable energy and reduce greenhouse gas emissions.
3. National Hydrogen and Fuel Cell Technologies Flagship Program:The South African government launched the National Hydrogen and Fuel Cell Technologies Flagship Program in 2008, which aims to develop hydrogen and fuel cell technologies and promote their commercialization. The program is led by the Department of Science and Innovation and involves collaboration between government, academia, and industry.
4. Tax incentives:The South African government provides tax incentives for companies involved in research and development related to hydrogen and fuel cells. This includes a deduction of up to 150 percent of qualifying expenditure on research and development activities.
5. Funding:The South African government provides funding for research and development related to hydrogen and fuel cells through various programs, including the Technology Innovation Agency and the National Research Foundation.
6. CoalO2-X RDI Programme:The government aims to use renewable or green hydrogen and pollutants (CO2, SOx, NOx etc.) contained in the flue gas from coal fired boilers to make value added products that can support the transition to a decarbonized energy system.
7. Sustainable Aviation Project:South Africa’s biggest ammonia supplier, Sasol Ltd, and Linde PLC bid for a project contract by the government (also under the Hydrogen roadmap) to produce sustainable aviation fuel (SAF) under the auspices of the German Federal Government’s H2Global auction platform.

Overall, the South African government has shown a commitment to developing a hydrogen and green hydrogen economy, as evidenced by the Hydrogen Society Roadmap and other policies and initiatives. The government's focus on research and development, as well as its support for the renewable energy sector, make it well-positioned to become a leader in the development of hydrogen and green hydrogen technologies.

p>The government also relies on global partnerships and foreign investments to kick-start its hydrogen production. It is currently developing its first Country Investment Strategy (CIS) (1), aiming to attract more foreign and domestic direct investment into the country. In January 2022, the government announced a new collaboration (2) with the German Ministry of Economic Cooperation and Development (BMZ) to launch a new project that will promote green hydrogen production in South Africa. BMZ will provide €12.5 million in funding to support the project, which aims to produce a strategic and regulatory framework for the green hydrogen economy in South Africa, coordinate the contribution of different stakeholders, and ensure high environmental standards.

 

The regulatory framework for hydrogen and green hydrogen in South Africa includes a range of policies and regulations governing the production, distribution, storage, and use of these fuels. Here are some key elements of the regulatory framework for hydrogen and green hydrogen in South Africa:

1. National Environmental Management Act:The National Environmental Management Act provides for the protection of the environment and the sustainable use of natural resources. It regulates activities that may have an impact on the environment, including the production and use of hydrogen and green hydrogen.
2. Gas Act:The Gas Act regulates the distribution and sale of gas, including hydrogen. The act establishes a licensing regime for gas distributors and provides for safety standards and regulations for gas storage and distribution.
3. South African National Standards:The South African National Standards provide technical specifications and guidelines for the production, storage, and use of hydrogen and green hydrogen. These standards cover areas such as safety, quality control, and performance.
4. Petroleum Products Act:The Petroleum Products Act regulates the import, export, and manufacture of petroleum products, including hydrogen. The act provides for licensing and regulation of facilities involved in the production and distribution of hydrogen.
5. Renewable Energy Independent Power Producer Procurement Program (REIPPPP): The REIPPPP provides a regulatory framework for the procurement of renewable energy, including hydrogen and fuel cells. It sets out guidelines for the tendering process, the qualification requirements for bidders, and the obligations of successful bidders.
6. National Energy Regulator of South Africa (NERSA):NERSA is responsible for regulating the energy sector in South Africa, including the regulation of hydrogen and green hydrogen. The regulator sets tariffs for energy providers and approves licenses for energy generation and distribution facilities.

Overall, the regulatory framework for hydrogen and green hydrogen in South Africa provides a comprehensive set of policies and regulations aimed at promoting the safe and sustainable production, distribution, and use of these fuels. The framework is continually evolving to keep pace with new technologies and developments in the industry.

South Africa has several assets in pursuing its hydrogen ambitions: deep expertise in the Fischer-Tropsch process (which is used in the production of power fuels), major production capacity of critical minerals necessary for hydrogen, and infrastructure that could be used for the hydrogen. The country is the world's largest producer of PGMs (platinum group metals), one of the key ingredients in the production of green hydrogen, yet platinum currently contributes very little to its GDP because most of the raw materials are exported. In fact, the Platinum Valley Initiative (PVI) is one of the four catalytic projects identified in the strategy document to kick-start the country’s hydrogen economy.

South Africa’s abundant renewable resources offer another advantage. A recent report by the National Business Initiative says that South Africa could produce green hydrogen for USD 1.60 per kg by 2030, one of the lowest costs worldwide. This could help the country reach its goal of doubling its current share of global hydrogen production by 2050—from 2 to 4 percent.

Here are some key infrastructure developments related to hydrogen and green hydrogen in South Africa:

1. Hydrogen refueling stations: Several hydrogen refueling stations have been installed in South Africa, including a station in Pretoria that was installed in 2018 as part of a pilot project. The station was funded by the Department of Science and Innovation and provides hydrogen fuel for fuel cell electric vehicles.
2. Renewable Energy Independent Power Producer Procurement Program (REIPPPP): The REIPPPP is driving the development of renewable energy infrastructure in South Africa, including infrastructure related to hydrogen and green hydrogen. The program has led to the installation of several large-scale renewable energy projects, which can be used to produce hydrogen through electrolysis.
3. Industrial projects: Several industrial projects are underway in South Africa that are focused on the production of green hydrogen. These projects include a partnership between Anglo American Platinum and ENGIE to develop a green hydrogen production facility at a platinum mine in Limpopo.
4. Research and development: Research and development initiatives are underway to support the development of hydrogen and green hydrogen infrastructure in South Africa. The South African National Energy Development Institute (SANEDI) is leading a research project on the development of hydrogen storage technologies, which could be used to support the growth of the hydrogen industry in the country.
5. Hydrogen buses: The City of Cape Town has launched a pilot project to test the use of hydrogen fuel cell buses. The project involves the use of two hydrogen fuel cell buses, which are being used to transport passengers on a route in the city centre.

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List of projects:

• Anglo American Platinum (AAP) and ENGIE partnership: AAP and ENGIE have partnered to develop a green hydrogen production facility at AAP's Mogalakwena platinum group metals mine in Limpopo. The project is expected to produce up to 3.5 MW of green hydrogen and up to 30 tonnes of green ammonia per day, which could be used as a feedstock for the production of nitrogen fertilizers.
• Shell and Toyota partnership: Shell and Toyota have partnered to build a hydrogen refuelling station at one of Toyota's dealerships in Johannesburg. The station will be used to refuel Toyota's Mirai fuel cell electric vehicle, which is currently being tested in South Africa.
• Proof-of-Concept (POC) project: Sakhumnotho Power has partnered with Keren Energy Investments to produce green hydrogen at a site supplied by Namaqua Engineering in Vredendal, Western Cape. This project is the first in South Africa to demonstrate the feasibility of producing green hydrogen using solar energy as the energy source. The generated H2 will be used in hydrogen fuel cell vehicles. 
• Hydrogen Valley: An industrial cluster, bringing various hydrogen applications in the country together to form an integrated hydrogen ecosystem. The South African government is working with the Anglo-American Platinum and ENGIE on this programme. The valley starts near start near Mokopane in Limpopo, through the industrial and commercial corridor to Johannesburg and leading finally to Durban. 

Overall, these projects demonstrate the growing interest in hydrogen and green hydrogen in South Africa and the potential for these fuels to play a role in the country's transition to a low-carbon economy.