Promoting the development of a hydrogen economy in South Africa (H2.SA)

In the context of a rapidly decreasing global carbon budget and urgency to identify adequate solutions for decarbonizing the so-called hard-to-abate sectors, the demand for "green" hydrogen (H2), which refers to H2 produced on basis of renewable energy sources via electrolysis, and renewable hydrogen-based products (PtX) such as ammonia and synthetic jet fuels, is steadily increasing. Many off takers (e.g. Germany, the EU, Japan) are willing to pay a premium price and to sign long-term supply agreements to stimulate the renewable H2/PtX market development. Renewable hydrogen, however, also offers domestic use opportunities to countries like South Africa, characterized by favorable solar and wind energy conditions, sufficient mineral resources and existing hydrogen value chains and industries. Given this potential, and within the framework of the German National Hydrogen Strategy, the Governments of Germany and South Africa agreed to cooperate on a renewable hydrogen project with the objective to contribute to the establishment of a green hydrogen economy for South Africa. The project "Promoting the development of a hydrogen economy for South Africa (H2.SA)" is part of the Development Cooperation (DC) program "Energy and Climate (Green Economy) in South Africa". The program aims to support the partner government in achieving its climate goals and to contribute to a more environmentally sustainable and less coal-based as well as climate-smart economy. The political partner of H2.SA is the Investment Infrastructure Office (IIO) in The Presidency. H2.SA aims to improve the conditions for building a RE-based ("green") hydrogen economy in South Africa. The global market for green hydrogen products is in its early stage and the first consortia of companies are currently building their first major plants around the world, with investment costs in the hundreds of billions of dollars. A participation in these new markets will require a massive expansion of RE capacity, far beyond the South African government's previous expansion plans; but in change, it offers new, alternative job opportunities, especially for workers employed in the crisis-ridden coal sector. In order to create these conditions, H2.SA supports local actors in improving strategic and regulatory framework, in creating favorable starting conditions for new economic activities in the field of research, development and training, and in aligning all these activities with international and national environmental and social standards. The overall goal of this project is defined as: The conditions for the development of a green hydrogen / power-to-X economy in South Africa are improved. The project has four outputs: (1) Decision makers have a basis for improving the strategic and regulatory framework for a hydrogen economy. (2) The conditions for companies to participate in a South African hydrogen economy have improved. (3) The technical capabilities of selected actors from politics, business, research, and civil society on the subject of hydrogen have been strengthened. (4) Relevant stakeholders' knowledge of the potential environmental and social impacts of a hydrogen economy is improved.