Companies need to harness large-scale collaboration to drive green hydrogen projects, says Sasol

Sasol, the country’s largest greenhouse gas emitter after Eskom, is busy pivoting its business into a more sustainable and future-fit enterprise, with an ambition of reaching net zero emissions by 2050.

A focus on green hydrogen is an important component of this strategy, but Sasol chief executive Fleetwood Grobler says this needs to be seen “through the lens of the long term rather than as a quick fix”. 

There is already a captive demand for grey hydrogen in South Africa (using coal as production input). 

“Sasol uses two to 2.5 million tons of grey hydrogen in South Africa from coal or gas. If you can transition grey hydrogen to green hydrogen, that translates to a captive demand of 2.5 million tons of clean hydrogen.

“The question is, when is it affordable to pivot to green hydrogen?” Grobler says. 

The cost of green hydrogen currently is around $3 to $5 a kilogram and Grobler says it needs to be around $1.5 to just under $2 a kilogram to be economically viable.

Added to this is the growing long-run global demand for green hydrogen, with the Global Hydrogen Council predicting that the world will need about 400 million tonnes to be supplied over long distance by 2050, highlighting the opportunity for South Africa to become an exporter. 

There is further local potential for green hydrogen economy initiatives with a focus on green steel manufacturing and mobility industries where heavy-duty fuel cell electric vehicles can be used for commercial and mining purposes, for example. 

Sasol recently entered into a joint initiative with powerhouse ArcelorMittal to establish a green hydrogen hub in Saldanha Bay, and is also investigating the possibility of using renewable electricity and green hydrogen to convert captured carbon from ArcelorMittal South Africa’s Vanderbijlpark’s steel plant into sustainable fuels and chemicals.

Sasol is already leading the Boegoebaai Green Hydrogen Development Project in the Namakwa Special Economic Zone in the Northern Cape, which will include a deep-water port, the use of 30GW of wind and solar, and a battery park to power 10GW of electrolysers by 2030.

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The Boegoebaai project will include the production of green ammonia linked to green hydrogen for export and for use as maritime fuel and feedstock.

Leveraging this “symbiosis” — in a deliberate move towards pooling the country’s resources — is how South Africa can leapfrog ahead in the green energy game, argues Grobler. 

To successfully unlock this potential, however, the industry will need to present a unified voice to government, ensuring that regulation and infrastructure are prioritised to create an enabling environment for the energy sector.

While he sees enormous potential ahead for the country, successfully leveraging these opportunities is a big task that may stretch beyond the abilities of a single company. As Grobler explains, collaboration will be the name of the game going forward. 

“The days of ‘closed corporate strategies’ are behind us and players in renewable energy cannot afford to ‘go it alone’.”

In terms of a timeline, Grobler says these ventures typically take between six and eight years to come to fruition. 

“I think it will only be towards the end of the current decade that we will see the first scale hydrogen, producing between 100,000 to 500,000 tons of green hydrogen a year,” he says.

Dominic Goncalves, a senior associate for decarbonisation solutions at Cresco Group, points out that new types of batteries and “long duration” energy storage may become commercially available and affordable enough to be deployed en masse, and green hydrogen costs may plummet, resulting in low-carbon back-up power for renewables. 

“However, there is scepticism around how long it will take for these new technologies to be commercially available at scale and economically viable, not least due to recent rising supply chain costs and inflation,” he says.

In the short term, the task at hand for players like Sasol is to secure off-take agreements with parties in countries in the European Union and in the Far East, like Japan and South Korea, to reach the levels of scale and economic viability needed to ensure the feasibility of the projects. DM/BM/OBP

Fleetwood Grobler is a member of the Green Hydrogen Panel; the inaugural chair of the Energy Council of South Africa; a board member of the Belgium-based Hydrogen Council, and a founding and steering committee member of the African Business Leaders Coalition of the United Nations Global Compact.