Sasol’s dream of a green hydrogen world

Still tagged as one of the biggest polluters in the country, Sasol has once again outlined its plans to produce green hydrogen to reshape the company and the energy industry in SA. The challenge is to get it done relatively quickly, and profitably.

CEO Fleetwood Grobler says Sasol is working towards becoming a major producer of hydrogen, produced using sustainable and renewable energy sources.

“The numbers are big. The world will need 400 million tons of green hydrogen per annum by 2050, according to the Global Hydrogen Council,” he says.

This is even before considering the potential of reindustrialising SA through local green hydrogen economic initiatives, by focusing on the steel manufacturing and transport industries.

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During a presentation hosted by PSG’s Think Big series, Grobler pointed out that technology lies at the heart of the transition to green energy.

“It is technologically viable, but it is not financially viable yet. The question remains when it will be affordable to pivot to green hydrogen,” he says.

“Currently, hydrogen costs between $3 and $5 per kilogram. It becomes viable as an energy source at $2 and very sensible at $1.50 per kilogram.”

As stated before, Sasol aims to reduce its reliance on fossil fuels. The group admits it has no choice as the use of coal is unsustainable.

In addition, the transition to sustainable energy and the production of green hydrogen present opportunities. “SA can become a net exporter of green hydrogen. It can effect change in other companies and industries.

“Hydrogen is a viable alternative for long-haul heavy-duty vehicles and for mining vehicles in operations that run around the clock. It presents an opportunity to reindustrialise SA in a sustainable way,” says Grobler.

Green hydrogen as an energy source can go a long way towards cleaning up other industries, such as steel making.

Grobler says  Sasol’s focus on green hydrogen is an important component of its future strategy, but needs to be seen “through the lens of the long-term” rather than as a “quick fix”.

Collaboration

Sasol recently announced a partnership with ArcelorMittal SA to promote the use of green energy and reduce carbon emissions. The partnership is to develop technology to capture CO₂ emissions and actually use it as in input in Sasol’s production processes, rather than source carbon from coal.

The partnership will launch studies into two potential projects.

The first will explore the potential of Saldanha Bay as an export hub for green hydrogen and derivatives, as well as green steel production.

The second study involves carbon capture at ArcelorMittal’s Vanderbijlpark steel plant and using renewable electricity and green hydrogen to convert the captured carbon into sustainable fuels and chemicals.

Grobler says collaboration will be the key to success in future.

“The drive to a lower carbon future and greener economy will require large-scale collaboration and success will necessitate enduring and resilient partnerships between leading companies, even in different sectors.

“Successfully leveraging opportunities is a big task that may stretch beyond the abilities of a single company.

“Collaboration will be the name of the game going forward. The days of ‘closed corporate strategies’ are behind us and players in renewable energy cannot afford to ‘go it alone’.

“Collaboration between Sasol and ArcelorMittal – between an energy company and a steel company – would have been unheard of in the past. It is unavoidable going forward,” says Grobler, indicating that Sasol’s strategy of responsible capital allocation also requires partnerships.

He sees Sasol holding a 20% to 30% stake in such ventures in future, backed by purchases by buyers of the output. Sasol has already approached potential buyers in Germany, France, Italy, the Netherlands, Japan and South Korea to discuss possibilities. South Korea and Japan are the world’s biggest producers of fuel cells.

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Technology

The technology to manufacture green hydrogen exists. Sasol already produces quite a bit of hydrogen, but is still using coal as an input. The manufacturing process uses renewable energy, with Sasol terming the product “grey” hydrogen.

It produces some two to 2.5 tons of grey hydrogen per day at its plant in Sasolburg. The challenge is producing green hydrogen soon, on a big scale.

Grobler says Sasol will produce its first green hydrogen next year and will be able to start large-scale production before the end of the decade.

“Scale production is possible within six to eight years. The biggest stumbling block is finding clients.”

He says the energy crisis in Europe has had an unexpected benefit in that it showed that change is possible. “At first, the war in the Ukraine created the fear that long-term sustainable energy would be put on the back burner, but countries navigated the crisis.”

Grobler says Germany, which sourced 50% of its natural gas from Russia, and Italy (40%), reduced its use of natural gas and proved that users can move to other energy sources.

He says there is already a captive demand for grey hydrogen in SA (using coal and renewable energy as production inputs), which is encouraging for Sasol given its ambitions to pivot to green hydrogen.

This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.