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Green Manufacturing in South Africa: How Green Hydrogen is Changing The Energy Landscape

by | Mar, 2021

Hydrogen has been described as ‘the fuel of the future’, always promising results that somehow seem just out of reach. Now it looks like the future is on the horizon. 

South Africa is not only well-positioned to adopt the manufacture of green hydrogen, but this could provide much-needed employment opportunities, energy generation, the balance of payment inflows and a host of other economic benefits.

What is green Hydrogen?

Hydrogen is the most abundant element in the universe with a high energy density and is becoming increasingly attractive as an alternative to fossil fuels. Hydrogen is a compelling form of energy for transportation and storage that could unlock greater potential for other forms of renewable electricity generation. For example, hydrogen provides a crucial solution to the challenges of intermittent supply and demand peaks associated with wind, solar and hydroelectricity generation. To this effect, hydrogen offers a viable means of storing energy which can then be converted to electricity.

Several countries have touted green hydrogen as a vital component of their decarbonization strategies and post-fossil-fuels-based economies. This is because, the byproducts of hydrogen through combustion or electrochemical reaction are, simply, heat and water. Green hydrogen, then, is hydrogen that has been produced using renewable energies through a process of electrolysis (see Figure 1).

Figure 1
Source: Prepared by TWIMS

Why now?

Patel (2020) notes that the recent interest in hydrogen has been driven by a strong global emphasis on emissions reduction and hydrogen’s ability to meet key government policy objectives such as:

  • energy security
  • reduced local air pollution 
  • economic development
  • increased energy access
  • increased synergies between renewable electricity generation and hydrogen as a means of energy storage
  • investment momentum stemming from other sustainable technology success. 

Demand for green hydrogen is accelerating in the European Union, Japan and South Korea, all of whom are positioning themselves as large importers of green hydrogen (Patel, 2020). This creates a significant opportunity for countries with high levels of renewable energy potential such as South Africa to become major exporters of green hydrogen. 

Forbes has described this green Hydrogen revolution as the future, stating that “seven of the biggest green hydrogen project developers have come together to launch the Green Hydrogen Catapult Initiative in a bid to increase the production of green hydrogen 50-fold in the next six years” (Scott, 2020).

Due to this new initiative, the cost of green hydrogen could be cut to less than $2/kg. This cost would sway manufacturing intensive countries to convert to green hydrogen as their primary energy source, thereby cutting emissions from the world’s most carbon-intensive industries, including steelmaking, shipping, chemicals production and power generation. 

South Africa as a hub for renewable energy and green Hydrogen production

South Africa has been identified as a major potential hub for green Hydrogen production. The country has abundant wind and solar potential – among the highest in the world (Hydrogen Council, 2020; Roos & Wright, 2021). The country also possesses 80% of the world’s Platinum Group Metals (PGMs) – critical resources used in the production of hydrogen through electrolysis and electricity generation from hydrogen using fuel cells (Minerals Council South Africa, 2019). Additionally, South Africa already possesses significant knowledge, intellectual property and expertise in hydrogen and fuel cell technology production. SASOL and Petro SA have existing expertise and infrastructure that could be used in its production, storage and transport. SASOL is experienced in producing brown hydrogen from coal. While brown hydrogen is not environmentally friendly, this can be combined with carbon capture storage to reduce carbon emissions by around 90% (Hydrogen Council, 2020). This would allow South Africa to capture a first-mover advantage while infrastructure for green hydrogen production is developed (Patel, 2020). Furthermore, Petro SA’s large gas-to-liquids refinery near Mossel Bay is running out of natural gas and is well-positioned to be repurposed to produce Hydrogen. The facility’s close proximity to the Coega SEZ and deep-water Port of Ngqhurha makes it an attractive potential hub for the production, storage and export of Hydrogen gas (Roos & Wright, 2021).

Economic opportunities for green hydrogen

According to Air Products South Africa, the price of grey hydrogen in South Africa is approximately R300 per kg in February 2021. This is far from the Japanese target price for imported blue/green hydrogen set at R52.20 per kg. However, this has been labelled as achievable for South African hydrogen producers (Creamer, 2020). Furthermore, a joint European Union and South African investigation into power fuels and green hydrogen found that a long-term price of R26.50 per kg for exported South African green hydrogen is possible (Roos & Wright, 2021).

Table 1: SA hydrogen prices
Source: Prepared by TWIMS using data from Air Products South Africa (Pty) Ltd (2021); M. Creamer (2020); Roos and Wright (2021)

Figure 2 shows the potential for surplus renewable energy generation to produce hydrogen in South Africa. For renewable energy to meet South African electricity demand, there will be inevitable surpluses during off-peak hours as well as when wind and solar electricity generation operate at the same time. This surplus electricity generation would otherwise be curtailed. The figure shows a significant opportunity for renewable energy-based green hydrogen production that would otherwise be wasted. 

Figure 2: Surplus renewable electricity used in Hydrogen production
Source: Enertrag (2021); based on Eskom and CSIR data

Green hydrogen in the transport sector

Green hydrogen has been targeted as a viable energy source for the transport sector, especially in sectors where CO2 abatement is difficult (Metcalfe, Burger, & Mackay, 2020). For heavy-duty and long-range transport applications hydrogen powered vehicles are expected to become more cost effective than battery electric vehicles in the short term (Hydrogen Council, 2020). Table 2 shows the expected timeframe for various road-based hydrogen powered vehicles to reach total cost of ownership parity with internal combustion engine and battery electric alternatives. It is important to note that the total cost of ownership refers to both purchasing and lifecycle running costs. Longer time frames (indicated by shades of red) suggest less suitability for hydrogen power as battery electric alternatives will become more established. Table 2 shows that HCVs (heavy commercial vehicles) and XHCVs (extra-heavy commercial vehicles) show the most potential for reaching cost competitiveness with ICEVs (internal combustion engine vehicles) and BEVs (battery electric vehicles). Furthermore, the table also shows good cost effectiveness potential for most vehicle types except for small short-range PVs (passenger vehicles) and short-range busses.

Table 2: Total cost of ownership of hydrogen powered vehicles versus ICEVs and BEVs
* Shades of green indicate greater competitiveness and shades of red indicate least competitiveness.
Source: Prepared by TWIMS using data from Hydrogen Council (2020, pp. 33-41)

Green hydrogen, a game-changer for South Africa’s energy landscape?

Hydrogen provides a game-changing opportunity for the South African energy landscape. Its use in various applications, to replace fossil fuels, is quickly becoming a reality. Not only does the country possess many of the resources to become a world leader in green hydrogen production, but it already has a first-mover advantage. Hydrogen provides clear opportunities for South Africa to become a major global energy exporter as well as build a new environmentally friendly and secure energy future for itself.

From an industrial policy perspective, a key question for South Africa is how much of the potential value from its hydrogen bounty could be captured locally? Will South Africa simply export hydrogen as a future commodity, and maximize financial returns from the process? Or will it attempt to deepen value addition and develop downstream hydrogen-based industrial activity, such as the manufacture of hydrogen fuel cell vehicles and industrial equipment?


Air Products South Africa (Pty) Ltd (2021). [Interview: Industrial price of South African Hydrogen].

Creamer, M. (2020). South Africa’s potential to export green hydrogen boosted Engineering news. Retrieved from

Creamer, T. (2017). New study points to 90% renewables mix being least cost by 2050. Engineering news. Retrieved from renewables-mix-being-least-cost-by-2050-2017-09-15

Enertrag (Producer). (2021). Green Hydrogen Export Opportunity for South Africa. [Presentation]

Hydrogen Council. (2020). Path to hydrogen competitiveness: A cost perspective. Retrieved from

Metcalfe, J., Burger, L., & Mackay, J. (2020). Unlocking South Africa's hydrogen potential. Retrieved from Strategy:

Minerals Council South Africa. (2019). National Platinum Strategy. Retrieved from

Patel, M. (2020). Green Hydrogen: A potential export commodity in a new global marketplace. Retrieved from TIPS:

Roos, T., & Wright, J. (2021). Powerfuels and Green Hydrogen. Retrieved from EU Chamber of Commerce and Industry in Southern Africa:

Scott, M. (2020). Green Hydrogen, The Fuel Of The Future, Set For 50-Fold Expansion. Forbes. Retrieved from

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