Johannesburg-listed Sasol has signed a memorandum of cooperation (MoC) with the Industrial Development Corporation of South Africa (IDC) to work together in developing a green hydrogen economy in South Africa.

Introducing Accelerate Hydrogen
We're pleased to announce the launch of Accelerate Hydrogen - the latest newsletter from Recharge and Upstream. Sign up now for an unbiased, clear-sighted view of the latest developments in the fast-growing hydrogen sector every week.

The agreement will see the pair collaborate on a non-exclusive basis to advocate for policy frameworks to enable a hydrogen economy in South Africa. They will also work together to develop pilot and commercial scale hydrogen projects, as well as to access local and international financing options.

“Green hydrogen provides an exciting opportunity for the country to create new hydrogen ecosystems and become a credible exporter of sustainable energy and chemical products, such as hydrogen, ammonia and sustainable aviation fuel, while increasing much-needed employment opportunities,” the executive vice president of Sasol’s energy business, Priscillah Mabelane, said.

“Our ambition is to lead and co-create South Africa’s hydrogen ecosystems through strategic partnerships, leveraging our proprietary technology and integrated value chain. We are delighted to partner with state-owned IDC in jointly pursuing South Africa’s green hydrogen potential to support a just energy transition and unlock new value chains to ignite the country’s economy.”

Fischer-Tropsch technology

Sasol claimed that South Africa’s “world class” renewable resources and infrastructure, combined with the company’s Fischer-Tropsch technology and skills, could position South Africa “as a leader in the global hydrogen economy”.

The Fischer-Tropsch process involves a catalytic chemical reaction which converts carbon monoxide and hydrogen in synthesis gas into hydrocarbons.

Sasol could use the technology to combine green hydrogen with carbon, captured from existing flue gas or from the air, to make liquid fuels and petrochemicals.

Sasol has been using Fischer–Tropsch technology for over half a century at a number of plants in South Africa. It currently utilises coal and natural gas as feedstocks to produce a variety of synthetic petroleum products, including most of the country's diesel fuel.

This technology reduced South Africa’s oil import bills and allowed for a degree of self-sufficiency when the country’s apartheid regimes were hit by economic sanctions.

'Game changer' for South Africa

South Africa’s Department of Trade, Industry and Competition (DTIC) stated in April the emerging hydrogen economy was a “game changer” and revealed the IDC would lead the commercialisation of South Africa’s green hydrogen efforts.

IDC chief operations officer Joanne Bate said on Monday that the development of a hydrogen industry would be a key enabler for South Africa’s transition to a decarbonised future.

“Hydrogen has the potential to decarbonise various industrial sectors. IDC intends on getting involved in the development of those catalytic projects needed to develop this new industry,” she said.

“We are looking forward to working together with Sasol in identifying and co-developing such catalytic projects. Our involvement in the development of the hydrogen industry also provides opportunities to fulfil our development mandate which entails job creation and opportunities to involve previously disadvantaged entities.”

Sasol to play 'leading role'

In February, Sasol chief executive Fleetwood Grobler told investors the company will “play a leading role in the country’s hydrogen economy,” highlighting it has a number of “proof of concept green hydrogen initiatives” underway, leveraging its Fischer Tropsch technology.

This Sasol-IDC agreement came three months after the Johannesburg-listed player and Toyota South Africa Motors formed a partnership to explore how a green hydrogen “mobility ecosystem” could be progressed in the country.

Sasol will bring to bear its experience in the production, use and marketing of grey hydrogen and aspiration to be a major green hydrogen player while Toyota will offer its hydrogen fuel cell (HFC) capabilities.

The two companies aim to pilot a project on one of South Africa’s long distance freight corridors - such as the N3 route between Durban and Johannesburg - for hydrogen-powered trucks.

The foundation of this initiative would be the introduction of HFC trucks into South Africa.

Sasol also has a partnership with Germany's Ineratec to make its Fisher Tropsch catalysts available for the production of green fuels and chemicals.

In addition to renewable resources and Fischer-Tropsch technological capabilities, South Africa is also poised to cash in on the hydrogen economy thanks to its vast platinum group metal (PGM) reserves.

PGMs are used in the electrolysers needed to produce green hydrogen and as a fuel in hydrogen fuel-cell electric vehicles. South Africa is estimated to hold more than 80% of the world’s platinum reserves.

Are you missing out on ACCELERATE?
Gain valuable insight into the global oil and gas industry's energy transition from ACCELERATE, the free weekly newsletter from Upstream and Recharge.