By Sue Segar – Associate Editor at Cape Business News
THE Freeport Saldanha special economic zone is poised to become one of the first movers to establish a green hydrogen hub in South Africa – but there is still work to be done.
So said Kaashifah Beukes, the CEO of the SEZ. In an interview with Cape Business News, Beukes said the leadership at the SEZ is currently working closely with private sector project developers who are looking at setting up projects in the green hydrogen sector and their derivatives with a view to helping them set up business cases for their projects.
Beukes, who also chairs the SEZ CEO Forum, representative of all the SEZs in South Africa, said the past year was a year of laying the groundwork for the establishment of the hub, which has entailed a great deal of legwork in both policy and business environments.
“We have focused on highlighting the value and potential of Saldanha in the policy environment this year, set from the 2021 national Hydrogen Society Roadmap by DSI, the national Country Investment Strategy by the Presidency in 2022, the JET-IP announced at COP27 in 2022, and the Green Hydrogen Commercialisation Strategy published for comment in December 2022. Provincially, the landmark Western and Northern Cape Government’s Heads of Agreement to foster collaborative on the green hydrogen economy and associated investments signed during October last year, also provided clarity to us and investors’ clarity that “GH2” is a priority for both provinces to attract investment, grow the economy, improve climate change resilience, and facilitate employment.
“We have also focused on working with project developers on their pre-feasibility studies and their feasibility studies, and working towards establishing their business cases, their technical standing, and the requirements for their projects.
“It is really important, head down work, where we work with the project developers to establish what the possibilities are and the technical, environmental and financial requirements of the projects,” Beukes said.
“This phase is a very necessary one, which will help to clarify and firm up what is needed from the public sector and from the private sector if we are to succeed in setting up this hub.”
The role of the Freeport, she continued, is “to be a catalyst” which will help facilitate the establishment of the hub. “For example, whether there are regulatory reforms or new instruments needed or where more infrastructure planning and execution is needed.
“We really are in the phase of bedding down the financial, technical and environmental requirements for the projects so that these companies will, next year, be in a position to take investment decisions.”
Companies which are looking at setting up green hydrogen projects include Sasol and ArcelorMittal.
“Sasol is looking at supplying ArcelorMittal with green hydrogen and is currently involved in a pre-feasibility study, with which the Freeport is assisting.
“They are looking into supplying the green hydrogen for use in the steel mill to reproduce green direct reduced iron (DRI). They were previously doing this using electricity from the grid – but that has become increasingly costly.”
Beukes said since the establishment of the SEZ in 2014, those at the helm have been hard at work establishing the zone. “It was greenfield when we started operations; there was nothing on the site, so we had to start from scratch, with getting zoning, environmental impact assessments etc. We have now serviced the land, we have the necessary environment permits in place, and we have done quite extensive work to create an enabling environment from the regulatory side, and to set it up as a customs control area (which was designated in 2019) and we have also secured agreements with the Transnet National Ports Authority and helped work with them to bring the offshore supplier base to fruition.
“Part of setting up this enabling environment has been to do work in the skills development space so that we can be a catalyst between investors and the labour market, so we have also trained over 2 500 people in relevant artisanal skills.
“Through our Saldanha Bay Innovation Campus programme, we’ve been helping startups gain market access and finance.
“We are firmly committed to position ourselves on the decarbonisation track through supporting project developers on their green hydrogen projects and ambitions.
“Saldanha has good wind and solar availability; it is quite a unique place as it has an industrial base already and its location close to the port, and to the existing port and rail lines means it is well placed to work closely into the future with many private sector project developers on their projects in their green hydrogen sector and their derivatives.
“The private sector is under increasing pressure to decarbonise their products and to adhere to the climate change objectives that have been set for 2030. Both the private sector and the government are responding to this need through policy and regulatory reform. This pressure is a driver for us.
“I think we will see some of these projects come about in the next three years. They might not be the big projects yet – but we will start with pilot projects and grow from there.”
