Report: South Africa Could Become a Hotspot for Zero-Carbon Fuel
The shipping industry is headed full-throttle for the reduction of carbon emissions. Ready access and cost-effective use of greener shipping fuels will be the defining moment for this shift. It’s therefore imperative to determine regions in the world that are poised to become hotspots for green fuels as heavy fuel oil is phased out.
Ricardo and the Environmental Defense Fund recently released a report suggesting that South Africa holds immense opportunity to supply the global shipping industry with zero carbon fuels. South Africa’s vast natural resources, geography and prominence along important shipping routes are among the factors that could catalyze the rise of a low-carbon shipping economy in the country. Over 90 percent of South Africa’s electrical supply comes from coal, and the adoption of zero-carbon fuels would also support the country’s overall carbon commitments.
“Our study shows that South Africa has an abundance of renewable energy potential. It is enough to supply the country’s domestic electrical demand as well the production of zero carbon fuels to supply commercial vessels refueling in its international ports. The adoption of zero carbon propulsion technologies at South Africa’s ports could attract investment of between [$8 and $12 billion] in onshore infrastructure by 2030. All that is needed to unlock this investment is the right policy incentive set at the International Maritime Organization,” said Aoife O’Leary, director of international climate at Environmental Defense Fund.
South Africa has been very proactive in charting a path for green fuels investment. Already, the government is developing a hydrogen strategy and investor roadmap where green hydrogen is identified as a first of the five “Big Frontier” strategic investment opportunities. The other four opportunities include next-generation digital industries and infrastructure; manufacturing and logistics supported by special economic zones; industrial cannabis and advanced agro-processing; and scaling of environmental, social and governance investments.
To further leverage emerging opportunities created by the transition to zero carbon shipping fuels, South Africa is considering a co-financing partner in the proposed greenfield Boegoebaai Port in the Northern Cape region. The government hopes to integrate facilities for production of green hydrogen and green ammonia for export into the new port complex.
A recent study commissioned by Agora Energiewende found that South Africa can develop the capacity to produce 3.8 million tonnes of green hydrogen by 2050. Two million tonnes of this hydrogen could be consumed domestically to produce synthetic fuels, green steel and chemicals. The report noted that such a production would help South Africa compete in import markets for green hydrogen, especially in Europe. where annual green hydrogen imports are projected to reach over 30 million tonnes by 2050.