Sasol Climate Change Report 2023 - Book - Page 15
INTRODUCTION
TRANSFORMING FOR RESILIENCE
GOVERNANCE
CLIMATE ADVOCACY AND POLICY
DATA AND ASSURANCE
THE LINKS BETWEEN FT, GREEN HYDROGEN AND DECARBONISATION
The importance of green hydrogen for
South Africa
The importance of green hydrogen
for Sasol
Green hydrogen is critical to the
decarbonisation of hard-to-abate sectors,
with additional benefits including the
reduction of criteria pollutants such as
sulphur dioxide, particulate matter and
nitrogen oxides.
Hydrogen is more than a decarbonisation
tool for Sasol. It can be used as a feedstock,
energy source or low-carbon fuel to
significantly reduce GHG emissions, in the
form of SAF, green ammonia or in mobility
solutions.
South Africa is one of only half a dozen geographies
that could develop competitively priced green
hydrogen and become a major clean energy supplier
to global markets. In the process of developing a
viable green hydrogen sector, South Africa can
increase renewables availability, particularly in areas
where the grid is constrained.
Affordable green hydrogen, enabled by global
regulatory support, will allow for the large-scale
production of SAF including through our recently
announced JV with Topsoe (subject to approval by
the relevant authorities) to decarbonise the
hard-to-abate aviation sector.
Several independent studies have projected that
South Africa could supply ~3 to 5 million tons
annually of green hydrogen and its derivatives for
the global market.
South Africa’s Green Hydrogen Commercialisation
Strategy (GHCS) and the Just Energy Transition
Investment Plan (JET-IP) form the backbone of the
country’s green hydrogen ambitions. The JET-IP
references Sasol’s 2030 GHG reduction target and
associated roadmap among the opportunities for the
country to achieve its NDC. Our future green
hydrogen potential is also recognised.
Unlocking investments into green hydrogen-related
projects requires supporting infrastructure
development. The South African government,
through the Infrastructure Development Act, has
included several hydrogen opportunities in the list
of Strategic Integrated Projects (SIPs).
KEY SIPs IN WHICH SASOL IS
INVOLVED:
Sasolburg Green Hydrogen
Programme
Sasol HyShiFT (Secunda)
Boegoebaai Green Hydrogen
Development Programme
Sasol’s Secunda Operations is a captive user of
~2,5 Mtpa of grey hydrogen, the production of which
is responsible for the bulk of our process GHG
emissions. Through the introduction of green
hydrogen, we can reduce these emissions and
simultaneously accelerate action to advance the
production of green hydrogen and its derivatives.
We are working with various partners to enable
South Africa’s green hydrogen ecosystem through
studies and the establishment of a pipeline of
projects across the value chain. These include both
new studies and repurposing of our existing assets.
South Africa’s potential to become a leading global
player in the green hydrogen economy derives from
the country’s abundant sources of renewable energy
– solar and wind – and mineral resources as well as
Sasol’s proprietary FT technology.
Our FT technology is agnostic to the sources of carbon
and hydrogen, which will allow our Secunda facility to
pivot away from coal in the long term. This means
that our biggest decarbonisation opportunity
emanates from the FT process’s ability to switch
from grey to green hydrogen and create economic
activity and jobs by marketing sustainable products.
Being able to readily repurpose our existing
assets is key to understanding Sasol’s compelling
green-hydrogen opportunity. We are one of only
a few companies globally in this fortunate position.
Our analysis shows that scaled production using
our assets gives us a 30% cost advantage over
greenfields facilities – ones that have to be built from
scratch. South Africa’s renewable resources can add
a further 20% cost benefit relative to, in particular,
markets in the Northern Hemisphere. It is precisely
because of the technology and assets we own,
combined with our people’s expertise, that we
believe Sasol has a key role to play in developing
South Africa’s green hydrogen economy.
Infrastructure needs and cost
Currently, we have the capability to produce up to
8 000 barrels per day (bbl/d) of fossil jet fuel, which,
if feasible, could be converted to produce the same
quantity of SAF. If we are able to reconfigure our
refinery processing units, it would be possible to
grow SAF production to ~20 000 bbl/d. We could
progressively ratchet up the production of SAF by
introducing green hydrogen and sustainable carbon
feedstocks where viable – in our case, primarily
industrial carbon sources.
• distribution.
Green hydrogen remains prohibitively expensive
because of the high cost of:
• equipment, eg electrolysers;
• renewable energy;
• storage; and
Infrastructure development is critical for large-scale
adoption of green hydrogen – currently most ports lack
the infrastructure necessary to ship hydrogen or
derivatives or receive it, limiting trade and adoption.
MAKING GREEN HYDROGEN A REALITY
REQUIRES:
Green hydrogen as an enabler of a
just transition
the cost of green hydrogen to fall
below $2/kg;
Green hydrogen can be used to build an
inclusive economy, particularly for vulnerable
groups that are impacted by the energy
transition. This position is echoed by South
Africa’s Just Transition Framework, published
in 2022 by the PCC, which incorporates
socio-economic imperatives such as access
to energy and transformation of the energy
system.
enabling policies and incentives for
renewable energy and green hydrogen;
S&P Global has estimated that over 370 000 net jobs
could be created in South Africa by 20501 through
investments in hydrogen, thereby fostering new
technological and industrial development, creating
many skilled jobs.
Several benefits can be triggered through green
hydrogen, including:
• Massive green power pools that can be deliberately
sized to provide renewables to the grid and deployed
for peak demand requirements.
• Improved access to water resources and a
commercial case for desalination investments
for domestic, agricultural and industrial uses.
• Employment opportunities during construction
of facilities and infrastructure, and in the long
term, once plants become operational.
1. IHS Markit (now part of S&P Global), Super H2igh Road Scenario for South Africa Report, 2021.
SASOL CLIMATE CHANGE REPORT 2023
14
product premiums to be available for
sustainable fuels and chemicals;
affordable green financing; and
flexible accounting rules for
emerging-economy players to coprocess feedstocks (fossil fuels and
sustainable inputs).
In 2022, Sasol began collaborating with the Port of
Rotterdam to establish a corridor into the European
Union market.
The April 2023 announcement of the European
Union’s RED II Delegated Acts (see pages 43 and 65)
has presented additional challenges for the SAF
HyShiFT project but engagements continue to
overcome these hurdles.