The arid landscape around Bloemhof and Geluk farms, adjacent to the drought-hit Namib-Naukluft National Park. Photo: John Grobler
a A group of Namibian and German entrepreneurs are developing a new smelting technology using green hydrogen, aiming to reduce the harmful effects of steel production. Globally, the steel industry is estimated to emit 3 million tonnes of carbon dioxide per year, which represents around 9% of global emissions.
“It's clear that Namibia is being severely affected by climate change… drought is having long-term negative effects,” said High Iron CEO Johannes Michels, a German-Namibian who returned to his native country 15 years ago to take over his family's farming business.
Recognizing that steel production is a large yet largely ignored aspect of global warming, HyIron and its partners began exploring ways to produce carbon-free steel as a potential business opportunity.
Michels says the turning point came five years ago when the state government of Lower Saxony in northwest Germany won a clean-energy competition with a proposal for carbon-free steel.
The project, which is funded by a €13.6 million (approximately R280 million) grant from the German Federal Ministry for Economic Affairs and Climate Protection, is located on Bloemhof Farm, about 80 km inland from the port of Walvis Bay, and is due to be fully operational by the end of 2024.
Michels says the company's proprietary closed rotary kiln technology was developed in collaboration with Lensing's German partners, where the first proof-of-concept plant was built, and produces zero waste and, more importantly in drought-stricken Namibia, uses very little water, which is continuously recycled.
Low Water Level
For Michels, a former farmer, the low water usage is a big selling point in a region with little water and no large natural aquifers to tap. All other green hydrogen projects in Namibia would have to build their own desalination plants, costing between $300 million and $400 million, not to mention the environmental impacts — a big upfront investment for a new project like this.
“At best, one tanker a week of water to be transported from Arandis, about 40km from the project site, will be sufficient,” he said.
Producing 1kg of steel using green hydrogen requires about 450 litres of fresh water. According to energy expert Hilton Trollip from the University of Cape Town, it is theoretically possible to set up a production facility with a closed-loop water system. He advised that although the technology exists, it has not been tested on a large scale to date and would be costly.
HyIron's Project Oshivela (which means iron in Oshiwambo) is building the first phase of a 25-megawatt solar farm to power the first kilns. In its final form, the farm will be powered by an 18-megawatt wind farm and a 140-megawatt solar farm.
Michels said the plant will only operate during daylight hours, during which it expects to produce enough renewable energy to produce about five tonnes of carbon-free steel per hour. In the first 3,000 hours of this phase, it is expected to produce 27,000 tonnes of green steel.
For raw materials, Hi-Iron is considering various options, including sourcing magnetite and hematite from the Lodestone mine, a privately owned mine about 30 kilometres from Doldavis, east of Windhoek. Initially, the company will use scrap steel to produce carbon-free steel briquettes to prevent oxidation in the final product, Michels said.
He said 200 jobs would be created during the construction phase and Hi-Iron expected to employ 50 full-time staff once the project was up and running in November.
One of Lodestone's small shareholders suggested its low operating costs could give the company, a high-grade but relatively small deposit that has struggled to compete in international markets, the economic impetus to develop into a fully-fledged 24/7 operation employing several hundred people.
Premium priced products
So far, Hi-Iron has not secured a customer for its steel products, but Michels said there has been significant interest from German heavy industry looking to use the carbon credit trading scheme to offset the cost of products that command a premium price.
This is an untested market, he added.The only other company pursuing a similar path is Swedish steelmaker SSAB, which aims to produce 5 million tonnes of carbon-free steel using only hydroelectric power by 2030.
Michels said Hi-Iron has not yet decided how much its product will cost, and that the price will be determined by the first company to bring sufficient volume to market to create economically sustainable demand for carbon-free steel.
HyIron is the only steel manufacturer that uses only renewable energy to produce carbon-free steel, and as such, it expects its product to command a premium price, he explained. In that sense, he expects HyIron to set the price as long as it maintains its position in this market.
Ammonia Fuel
At the neighboring Geluk farm, a joint venture is developing solar and wind farms for a project aimed at producing ammonia fuel for shipping and rail transport, but the project appears to have stalled.
Of nine green hydrogen projects under development in Namibia, this one is generally seen as the most promising because it involves local private capital, according to independent energy consultant Dettloff von Etzen. It is a joint venture between Belgian shipping company CMB.Tech and local agro-industrial giant Alltuber & List's Clean Energy Solutions.
Unlike HyIron's standalone design, this project has many moving parts: a solar- and wind-powered, alkali-based hydrogen plant on Geluk Island that will be connected by 75 km of power lines, a high-pressure hydrogen pipeline, and a water pipeline that will pump distilled water from shore to feed the hydrogen plant.
According to an environmental impact assessment report, the project plans to generate renewable energy to power a coastal desalination plant, which is not yet operational, to supply an inland hydrogen plant, which then pumps ammonia to hydrogen refueling stations.
Clean Energy Market
The hydrogen station, located at Farm 58, about 10 kilometers from Walvis Bay, was inaugurated during an official visit by Belgium's King Philippe in late February. Belgium's interest in Namibia's green ammonia appears to be linked to King Philippe's investments in shipping, and with Antwerp a major energy hub in Central Europe, ammonia fuel could gain traction in the clean energy market, said economist Roman Grinberg.
The Farm 58 project is one of many underway, as well as one of many partners (CMB.Tech, Clean Energy Solutions, Elof Hanson Green Hydrogen Namibia and Power Play Investments) that appear to be in some sort of dispute right now, said Graham Hopwood, executive director of the Public Policy Institute.
The infrastructure costs are enormous: a desalination plant large enough to provide enough water to produce 2 million tons of ammonia per year would be needed, which would then have to be pumped 75km inland and uphill to the hydrogen plant at Pharm Geluk, plus a high-pressure hydrogen pipeline to deliver hydrogen to CMB.Tech's ammonia plant at Pharm 58, and a transmission line to carry enough electricity from Pharm Geluk to the coast to power both the desalination plant and the ammonia production facility.
“There appears to be a disagreement about how to cover the development costs,” Hopwood said in a brief phone interview. CMB.Tech and Clean Energy Solutions did not respond to requests for comment.
John Grobler is an associate based in Namibia. Ox Peckers Investigative Environmental JournalismThis survey #PowerTracker Series on Green HydrogenSupported by the Heinrich Böll Foundation.