The European Union (EU) sees green hydrogen as vital for the future of global energy. The EU values its partnership with South Africa for the development of green hydrogen aimed at reducing emissions in heavy industries and parts of the transportation sector.
Frank Oberholzer from the EU delegation to South Africa emphasized the importance of this collaboration.
Oberholzer highlighted that the EU plans to produce and import a total of 20 million tonnes of green hydrogen by 2030. This commitment was underscored by a recent investment of R628 million to support South Africa’s green hydrogen initiatives. The EU’s strategy includes domestic investments and partnerships worldwide to build a comprehensive hydrogen economy.
Partnership with Transnet
As part of this agreement, R138 million will be allocated to help Transnet, the state-owned rail, port, and pipeline company, which reported significant financial losses. The EU believes that with proper safeguards in place, the grant should be used efficiently.
The EU’s funding will be managed by Agence Française de Développement (AFD), ensuring thorough due diligence, risk assessment, and project monitoring. This oversight aims to ensure the effective use of the funds allocated to the green hydrogen project.
Experts like Bruce Douglas Young and Craig McGregor argue that the current investment is insufficient for South Africa to become a global leader in green hydrogen. Environmental groups also express concerns about the potential displacement of people and resource demands associated with green hydrogen production.
Additional Funds
The EU’s R490 million grant aims to attract R10 billion in private and public sector investments across the green hydrogen value chain. This includes production, transport, storage, and downstream industries, hoping to draw more investors to the sector.
Cyril Ramaphosa highlighted the economic benefits of green hydrogen at a summit, noting it could add 3.6% to South Africa’s GDP by 2050 and create approximately 370,000 jobs. However, the country needs significantly more investment, estimated at R410 billion, to achieve its green hydrogen goals.
Green hydrogen is a crucial component of South Africa’s plan for a just energy transition, aimed at decarbonizing the economy equitably. This initiative was emphasized at COP28 in Dubai, where green hydrogen was identified as one of the key areas in the country’s energy transition roadmap.
Finally, Oberholzer reaffirmed the EU’s support for South Africa’s green hydrogen efforts, stressing that international cooperation is a core pillar of the EU’s Green Hydrogen strategy.
