Going green: The EU and South Africa announced a deal worth R628 million to support green hydrogen plans. (Wald Sweghers/Bloomberg via Getty Images)
South Africa and the European Union have announced a deal worth R628 million to support the country's green hydrogen plans.
Announcing the two grants in a joint statement, European Commissioner for Energy Kadri Simson, Minister of Electricity and Energy Kosientosho Ramokgopa and Minister of Trade, Industry and Competition Parks Thau said the partnership will focus on building renewable energy infrastructure, improving energy efficiency and promoting sustainable practices.
“The initial R490 million EU grant is expected to leverage R10 billion in private and public sector funding across the entire hydrogen value chain, including production, transportation, storage and downstream industry,” they said in a statement on Monday.
This is in line with South Africa's plans to expand its green hydrogen sector and follows the announcement of an agreement to launch a $1 billion blended finance fund to accelerate the development of the sector.
The EU grant will be paid in two installments, with the second going to Transnet, the state-owned company that manages the country's rail ports and pipelines.
“The second EU grant of R138 million to support Transnet's turnaround strategy is expected to leverage additional funding towards greening the company's core business areas, including ports, rail, pipelines, engineering and associated facilities,” the statement said.
The topic of green hydrogen is controversial, with proponents arguing that it is a cleaner energy alternative and can play a major role in reducing carbon emissions. Green hydrogen can be used in electricity production, fuel, vehicle power, and manufacturing sectors such as steel. Opponents say that green hydrogen is problematic because it requires a lot of land and energy to produce. Also, green hydrogen is not a clean energy source unless the energy is renewable.
“The main objective is to increase investment in green hydrogen infrastructure and contribute to reducing greenhouse gas emissions, especially in challenging sectors, creating jobs, providing water treatment and promoting regional development and economic growth by expanding access to hydrogen energy. [green] “Energy,” the statement said.
The project aims to help Transnet achieve net zero carbon emissions by 2040 through research and pilot projects that will “focus on low carbon hydrogen production and storage, build Transnet's green hydrogen strategy and mobilise technical assistance to enable the expansion of green hydrogen projects in South Africa”.
Simson said the partnership with South Africa “shows that the EU Global Gateway strategy is working, promoting smart, clean and safe connections in the areas of energy and transport”.
“Our collaboration in support of South Africa's green hydrogen plan aims to accelerate the green transition, drive sustainable development, create new economic opportunities and build a more sustainable future for the region,” she added.
