Coega’s Plan for Green Industrialisation through Hydrogen Projects and Value Chains
Ms. Asanda Xawuka, Coega’s Executive Manager: Business Development moderating a panel discussion on Leadership and Initiatives Toward a Cross-border Global Hydrogen Trade Market at the 2023 Hydrogen-Africa Conference and Expo in Johannesburg on 28-29 September 2023
The global community is increasingly recognising the necessity to transition toward a low-carbon economy, and there is an acknowledgement of the significant potential of green hydrogen as a key solution for decarbonising energy systems and achieving climate goals. Green Hydrogen, as a versatile energy carrier, has garnered significant attention due to its potential to mitigate carbon emissions across various sectors, including the heavy metals industry, transportation, and power generation, amongst others.
Green hydrogen represents a major sustainable growth opportunity for developing countries, which if properly leveraged, could contribute nearly 70% of the US$1.4 trillion market in 2050 while supporting up to two million jobs globally per year between 2030 and 2050, according to a Deloitte Report released in 2023.
Sufficient investment into areas such a transport infrastructure to support inter-regional trade is pivotal in unlocking the full potential of the green hydrogen market. The opportunity in the African context, is for the different regions that are currently able to produce cost-competitive hydrogen in quantities, to position themselves as future hydrogen exporters—supplying other less-competitive regions and helping to smoothly facilitate the energy transition.
The Coega Special Economic Zone (SEZ) has been engaging with different investors looking at Green Ammonia and Methanol production. The location of the Coega SEZ is ideally situated to induce downstream industries and provide facilities for production. The existing infrastructure provides an immediate opportunity to position the SEZ as an export hub.
The existing policies and regulations in the SEZ assist to drive the development and deployment of green hydrogen technologies production. These policy initiatives, such as soft and financial incentives are aimed at creating a favourable environment for investment, stimulating manufacturing activity, and accelerating the transition to a low-carbon economy. Furthermore, these incentives could assist in reducing the financial barriers associated with establishing green hydrogen projects, in these development nodes.
Coega also foresees the development of hydrogen projects that leverage existing infrastructure, including renewable energy installations, industrial facilities, and transportation networks. By strategically locating these projects within the Coega SEZ, Coega intends to create a symbiotic relationship between hydrogen production and industrial sectors. This approach will help enable the production, storage, transportation, and utilisation of hydrogen within a localised ecosystem, facilitating a seamless transition towards a greener and more sustainable industrial landscape.
One of the key aspects of Coega’s plan for green industrialisation is the creation of green hydrogen value chains. These value chains encompass the entire lifecycle of hydrogen, from production to end-use applications. This includes applications in transportation, power generation, heating, and industrial processes which would contribute to reduction of carbon emissions, thus in line with Coega’s Sustainability Framework while stimulating socio-economic growth.
However, several challenges need to be addressed for the successful implementation of the hydrogen development economy within the country. These include the high initial costs associated with building hydrogen infrastructure, technological and logistical complexities, regulatory frameworks, and public acceptance. Coega believes that collaboration with relevant stakeholders, such as government agencies, industry partners, and research institutions, to provide solutions to these challenges would lead to advancing the development of the hydrogen economy within South Africa.