Obstacles confront South Africa's prospects for Green Hydrogen production
In the heart of Africa, under the banner of the African Union's Agenda 2063 and South Africa's G20 Presidency, the vision for energy is advancing. The goal is to create energy that is just, inclusive, and transformative. This ambition is echoed in the African Green Hydrogen Report, a publication by the German development agency, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).
Historically, South Africa has been a mining powerhouse, but its production has decreased significantly since the mid-2000s. Factors such as the depreciation of gold mines, labour unrest, an electricity supply crisis, sharply increasing electricity costs, logistics bottlenecks, policy and regulatory uncertainty, and the lack of an efficient system for managing mining rights and applications have contributed to this downward trend.
However, the African Green Hydrogen Report identifies South Africa as a potential significant player in the Green Hydrogen sector. With access to all but 3 of the 22 critical minerals needed to develop the Green Hydrogen industry, the country has a high potential for fostering a Green Hydrogen industry.
Green Hydrogen is produced using electrolysis from seawater, and South Africa has a high potential for this industry. The report notes that issues like an electricity supply crisis, rapidly escalating electricity prices, and logistics bottlenecks have led to a reduction in the size of the iron and steel and ferroalloy industries in South Africa.
The processing of critical minerals to support the energy transition is currently concentrated mainly in China, but Africa has an opportunity to grow its mining sector due to increased demand for Green Hydrogen and Green Hydrogen related renewables sector goods. Beneficiation, or processing resources locally to increase the economic value of exports, is an advantage for South Africa, but has not been fully realized due to the aforementioned issues.
The report aligns with the shared commitment to three pillars: energy sovereignty, social equity, and regional integration. President Cyril Ramaphosa has included harnessing critical minerals for inclusive growth and sustainable development as one of his priorities for South Africa's G20 presidency in 2025.
Ramaphosa has also called for a G20 framework on green industrialisation and investment to promote the beneficiation of critical minerals close to their source of extraction. This sentiment is echoed by Minister of Electricity and Energy, Kgosientsho Ramokgopa, in the report's foreword.
Despite beneficiation being a policy objective in South Africa since the late 2000s, mining production has been trending downwards since the mid-2000s. The report sees the Green Hydrogen industry as an opportunity to revive the South African mining sector.
The report was often presented in initiatives like the South Africa-Green-Hydrogen-Insights-Reihe or in collaboration with African and German partners. However, it is not an official publication of the German federal government, but a result of private-sector and development cooperation efforts.
For more detailed information or access to the full report, it is recommended to research directly on the website of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) or relevant industrial partners. If you have further questions about the Green Hydrogen initiative in South Africa or German institutions involved in this field, I am happy to help!
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