The rise and roadblocks of South Africa's green hydrogen economy

Mail & Guardian

26-06-2025

Green hydrogen is hydrogen gas made from renewable energy sources such as solar or wind power. (File photo)
Africa is uniquely positioned to become a major player in
President Cyril Ramaphosa stated this in his
Green hydrogen is hydrogen gas made from renewable energy sources such as solar or wind power. It is 'green' because its production does not create pollution or carbon emissions, unlike other types of hydrogen produced from fossil fuels.
According to Ramaphosa, green hydrogen is a way to 'marry our continent's mineral riches with our renewable energy endowments' to decarbonise particularly heavy industries, to create jobs, to stimulate investment and to unlock inclusive growth across the various borders.
However,
While the government continues to tout the economic potential of green hydrogen, including job creation, industrialisation and GDP growth, the coalition said that community organisations want full transparency, proper consultation and evidence of tangible benefits on the ground.
In his speech, Ramaphosa noted that there are more than 52 large-scale green hydrogen projects that have been launched across Africa. To date, South Africa has invested more than R1.5 billion into its Hydrogen South Africa programme.
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These include the cost factor, capital intensity and the high costs of financing relative to other energy sources, such as natural gas.
H2Watch said that, in 2023, civil society had tabled its
'However, fears such as redirection from communities of water resources, displacement, destruction of marine life, environmental harm, lack of consultation and public resources being funnelled into risky, export-driven projects loomed larger.'
After the release of the
'Over the last few years, we have seen the green hydrogen bubble bursting, both here and abroad,' noted Fatima Vally, the director of programmes with
Vally said that a number of the green hydrogen developments that former minister of public works Patricia de Lille designated as special infrastructure projects in December 2022 'have either stalled or been paused'.
H2Watch said that in an April 2024 letter to Macua, AngloAmerican indicated that 'a decision was made to demobilise the
In July last year, the developer Enertrag, that was to establish an
Mail & Guardian's
enquiries.
H2Watch said that, in an email response in March, a Sasol official reportedly stated that while green hydrogen 'represents a credible and potentially lucrative industrial horizon for South Africa in coming decades (particularly as a mid-horizon export sector and as a long-horizon replacement for gas), green H2 will not be imminently economical and will not solve our near-term transition challenge'.
Matebello Motloung, Sasol's group media relations manager, told the
M&G
that it continued to view green hydrogen as a 'compelling, long-term opportunity for South Africa, essential both for sustainable industrialisation and for positioning the country as a global clean energy leader'.
'Our abundant renewable energy potential supports this vision. However, while we affirm that the narrative is correct, success depends fundamentally on timing.'
The commercial-scale viability of most green-hydrogen applications is still several years away, Motloung said.
'That said, Sasol is taking deliberate steps — responsibly scaling up for when market, technology and regulatory conditions align, balancing carbon reduction with economic growth and shareholder value.
'A clear example is our Sasolburg facility, which is demonstrating renewables-powered electrolysis and low-emission hydrogen production at scale. This facility is laying the groundwork for a broader domestic green hydrogen economy.'
Sasol remains firmly committed to green hydrogen, viewing it as a strategic, longer-term mission. 'We are pragmatic, recognising that full-scale, commercially viable deployment is some years ahead. We are investing now, with Sasolburg serving as a proof-point, and will continue to build the ecosystem. And we will scale in line with customer requirements.'
According to the coalition, green hydrogen projects are stalling and not coming on stream. 'Unfortunately, government ministers and President Cyril Ramaphosa speak glowingly about green hydrogen projects, giving an impression that the developments are going ahead,' Vally said.
'Stonewalling and revelations that the projects were no longer proceeding is the response that community organisations that are part of … H2Watch have received when they enquired — away from the glare of the media — on what was happening in their localities.'
The 'fragility' of South Africa's green hydrogen vision reflects global developments in the sector, H2Watch said. In Europe and Australia, green hydrogen projects have been delayed or scaled back due to high costs, weak demand and uncertain returns. Only about 10% of projects worldwide have reached a final investment decision.
'In China, electrolyser production is being cut due to oversupply and low market demand, raising doubts about the sector's near-term viability,' it said, noting that electrolysers are critical devices used to split water into hydrogen and oxygen using electricity.
The coalition maintained that unless corrected, the green hydrogen push threatens to replicate extractive, exclusionary development models witnessed in mining and large-scale renewable energy projects.
Special economic zones —
'Worse still, civil society warns that South Africa may take on significant public debt to bankroll speculative projects that might never materialise. H2Watch is concerned that project announcements are always loud, yet the details — especially those affecting people's land, water and livelihoods — are not discussed openly.'