Three multinational companies, Sasol, BMW, and Anglo American, are set to sign a new agreement regarding their collaboration on the use of green hydrogen in the transportation sector.
Green hydrogen is produced by splitting water into oxygen and hydrogen using renewable energy sources like wind or solar power. This green hydrogen is considered a low-carbon energy source compared to fossil fuels such as coal or oil. Its application as an energy and fuel source is particularly significant for industries facing challenges in reducing emissions, such as steel and cement manufacturing, aviation, and other modes of transport.
The memorandum of cooperation between these three companies is expected to be formalized at South Africa’s second Green Hydrogen Summit. Sasol will play a crucial role as the supplier of green hydrogen to Anglo American and BMW, with a focus on transforming commercial and passenger fleets.
Companies are increasingly seeking ways to reduce emissions in their production processes, especially as the European Union plans to implement the Carbon Border Adjustment Mechanism, a tax on imports based on their carbon content.
During the summit, three coastal provinces – the Northern Cape, Western Cape, and Eastern Cape – will enter into a memorandum of understanding to collaborate on developing an inter-regional green hydrogen strategy. This strategy will encompass shared logistics, infrastructure, and manufacturing facilities.
The Electricity Minister, Kgosientsho Ramokgoa, emphasized the importance of this cooperation agreement in elevating the potential of green hydrogen in South Africa, transcending administrative and political boundaries.
This memorandum of understanding builds upon one previously signed by the Western Cape and Northern Cape at the inaugural Green Hydrogen Summit. The MoU outlines how the provinces will support each other in developing green hydrogen capabilities, with aspirations to collaborate with Namibia to create a regional green hydrogen corridor spanning both countries.
Ramokgopa also provided an update on the Green Hydrogen Commercialization Strategy, stating that it is in the final stages of approval and will soon be submitted to Cabinet for consideration.
The plan focuses on building markets for green hydrogen, with a strong emphasis on heavy industries like steel and transportation, particularly trucks. South Africa’s coastal regions are well-suited for cost-effective green hydrogen production due to existing infrastructure, including ports, renewable energy resources such as wind and solar, and desalinated seawater for hydrogen production.
Despite the prohibitive costs associated with green hydrogen, it is not ruled out as part of South Africa’s future energy mix. Most green hydrogen projects are still in pre-feasibility stages and require significant investment to advance along the project life cycle for implementation.
The Green Hydrogen Summit will take place over two days in Century City, Cape Town.