South Africa gets R626 million green hydrogen boost

The European Union will provide two grants totalling €32 million (R626 million) to help South Africa kick-start its green hydrogen industry, Kadri Simson, Europe’s energy commissioner, said. 

The grants will enable South Africa to take advantage of its abundant wind and solar resources to produce green hydrogen, which is seen as a potential clean alternative to the fossil fuels used to power ships and heavy industry.

Green hydrogen is produced by using renewable energy to split water and release hydrogen, which can be burned without producing climate-warming gases.

While countries such as South Africa, neighbouring Namibia, Egypt and Chile are positioning themselves to produce the fuel, it’s still too expensive to compete with oil derivatives.

Still, there’s an expectation that the fuel will become more attractive as prices fall with improving technology and penalties on the use of fossil fuels increase.   

“These two European Union grants will be implemented in a way so that they contribute to South Africa and the local economy,” Simson said at an event in Pretoriam the country’s cpaital, on Monday.

“They will leverage further public and private investments across climate change. And for this, we will work with global development finance institutions and European public funds.”

The money is from the European Union budget and is separate to the $9.3 billion Just Energy Transition Partnership, a climate finance pact between South Africa and some of the world’s richest countries. The EU has provided support similar to Namibia’s.

The money will be used in the “green hydrogen value chain,” Kgosientsho Ramokgopa, South Africa’s energy minister, said, adding that it will be deployed to assist Transnet, which runs ports and pipelines on behalf of the state and could play a role in setting up hydrogen ports and other infrastructure.