ANC eyes South Africa’s new ‘gold rush’

The ANC has cemented its push toward the green economy in South Africa.
Speaking at the ruling party’s executive committee on its 8 January celebrations, ANC president Cyril Ramaphosa said that South Africa would develop the productive capacity to participate in the global green energy value chains, including green hydrogen and electric vehicles.
“The ANC recognises important work in the Hydrogen Roadmap and directs the government to implement further supportive policy measures and actions to enable South Africa to become a green hydrogen centre,” said Ramaphosa.
The process of creating hydrogen fuel through solar or wind-powered electrolysis, known as green hydrogen, has become a hot topic in South Africa in light of the fact that it could draw in a billion rand industry while decarbonising the economy.
Green hydrogen projects form a part of the country’s shift away from coal-reliant energy supplies as one of the latest Just Transition Investment Plan’s four frontiers.
The South African government has already set aside R300 billion (about $20.8 billion) for funding green hydrogen projects through Infrastructure South Africa (ISA). However, the country’s Minister of Public Works and Infrastructure, Patricia de Lille, has stated that additional funding will be needed.
A feasibility report estimates that the cost of producing green hydrogen in South Africa will be around $4 per kilogram by 2030, which is $2 more than traditional hydrogen production methods.
According to the energy transition advisory group Royal HaskoningDHV, Gladys Nabagala, South Africa is primed for green hydrogen as its size and climate allow for some of the highest renewable energy loads from solar and wind as well as having abundant land in proximity to oceans – among other things.
In late November 2022, Ramaphosa, alongside the Department of Public Works and Infrastructure, announced the initiation of South Africa’s Green Hydrogen Summit, outlining new mega projects for the country.
Under the Green Hydrogen National Program (GHNP), there are 19 projects aimed to take place as soon as possible after they are gazetted.
Other green economy steps
Ramaphosa said that the ANC is also poised to direct the government to expand incentives to the electric manufacturing industry to accelerate the just transition.
He added that there are other new opportunities in the green economy in areas such as developing rare earth and platinum group minerals for green manufacturing.
Regarding electric vehicles, as part of international climate funding, the government has already made plans to spend billions of dollars creating an electric vehicle industry in the country.
One of South Africa’s largest sources of foreign cash is the country’s auto sector, but it is in jeopardy as Europe – its key market – promotes cleaner alternatives to conventional gasoline-powered cars.
The European Union is South Africa’s main export region for cars. By 2030, Naamsa expects 40% of all vehicle sales in Europe to be EVs – this number could increase to 80% by 2040.
According to industry experts, if South Africa wants to continue doing business with Europe, it will need to get become a key player in electric vehicle production. Failing to do so will have a huge impact on the country – potentially losing R200 billion in export earnings a year.
Read: The big risks being overlooked in South Africa’s new energy ‘gold rush’