The European Union’s rush to discover new energy sources to lessen its dependency on Russia has given Sasol Ltd., South Africa’s largest fuel manufacturer, a fresh reason to push forward with its green hydrogen plans.
On South Africa’s northwest coast, Sasol is focused on green hydrogen, which is produced by devices called electrolyzers that are driven by the wind and sun.
According to Sasol’s Chief Executive Officer Fleetwood Grobler, the business is conducting a feasibility study that will be completed in two years.
“In the last two months, the impetus for renewables like hydrogen has gone up a couple of notches,” Grobler said in an interview.
“What has changed in my thinking is that we need to move faster and faster on our hydrogen plays.”
The spike in energy demand may assist Sasol, which has been transforming coal into synthetic chemicals for more than half a century, in making a speedier transition to cleaner fuels.
According to Grobler, South Africa’s second-largest polluter didn’t have a strategy to convert to green energy until a little over a year ago.
It now aims to achieve net-zero emissions by 2050, similar to Shell Plc and TotalEnergies SE.
Europe is looking for alternative energy sources in response to Russia’s invasion of Ukraine, in order to deprive Russia of funding to pay the war. Green hydrogen will play a significant role in the mix.
The European Union has increased its target for green-hydrogen capacity to 80 gigawatts by 2030, up from less than 1 gigawatt now. The United Kingdom recently established a goal of producing at least 5 gigawatts of capacity by 2030.
Even yet, it would take at least five years for Sasol to start exporting the clean fuel. The trick will be to reduce prices from around $5.5 per kilogram to $1, according to Grobler. The business intends to hire partners, but he declined to provide an estimate of overall costs.
Mukesh Ambani, Asia’s second-richest man, owns Reliance Industries Ltd., which aims to invest $76 billion in similar projects.
According to Antoine Vagneur-Jones, an analyst with BloombergNEF’s energy transitions team, South Africa “would face competition from would-be exporters who are farther ahead in creating a green hydrogen production pipeline,” such as Australia and Chile.
It is critical for Sasol to make a smooth transition. The corporation has recovered from a spate of disasters, including an oil price fall and an overbudget growth of its chemical sector in the United States, which increased its debt burden and sent the stock to a 20-year low.
Sasol currently wants to avoid making large investments in natural gas infrastructure, such as a pipeline that would run from northern Mozambique to reserves there.
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Sasol is looking at collecting up to 3,000 megawatts of renewable energy in order to produce 100,000 tons of green hydrogen for export. As Africa’s most industrialized nation struggles to create adequate energy, this might be a problem.
“The finest endowment of sun and wind in southern Africa is from Saldanha Bay to Walvis Bay,” Grobler added, pointing to a former South African steel-making hub and a Namibian port on the West Coast.
He said Sasol’s Boegoebaai project would serve as a “first peg” in a strategy to extend domestic usage of the fuel, including the construction of a pipeline that would reach the provinces of Gauteng and KwaZulu-Natal.
Carbon Capture
Another business option for the corporation is aviation fuel. Its Fischer-Tropsch technology, which was created in the 1920s and is named for the Germans who invented it, is assisting it in the development of synthetic jet fuel.
The technique, which can extract carbon straight from the air to form carbon monoxide, may then be coupled with green hydrogen to create aviation and other fuels, according to the business.
According to Grobler, the business is in talks with up to five “big” airlines.
According to Grobler, Sasol’s ambitions to switch to green fuels can help it reclaim its blue-chip status.
He stated, “The firm is redefining itself.”
