9/17/2026 12:00:00 PM
South Africa’s Phelan Green synthetic aviation fuel (eSAF) project at Saldanha Bay has become the first of six projects in the country’s initial green hydrogen development wave to reach final investment decision (FID), marking a shift from development toward construction and commercial execution. The project has secured an offtake agreement, committed $100 MM in equity and ordered major equipment.
Construction is expected to begin in 1Q 2027, with first exports targeted for 1Q 2029. The first phase is designed to produce about 35,000 tpy of eSAF, with a broader Phelan Green Hydrogen Project investment value of about R47 billion ($2.9 B). The full financing structure for the first phase has not yet been disclosed, and details of the offtake agreement, including buyer, pricing and contract duration, remain confidential.
Phelan has assembled a technology chain involving Johnson Matthey and Honeywell. Johnson Matthey’s HyCOgen technology will convert captured CO2 and electrolytic hydrogen into syngas, while its FT CANS process will produce synthetic crude. Honeywell UOP’s Fischer-Tropsch Unicracking technology will then upgrade the hydrocarbons into aviation fuel. The project is significant within the broader African hydrogen sector, where high financing costs, uncertain demand and infrastructure constraints have slowed development. The IEA reported that only one of Africa’s 31 low-emissions hydrogen projects targeting production by 2030 had reached FID.
Europe’s ReFuelEU Aviation framework provides an emerging demand base, requiring synthetic aviation fuels to reach 1.2% of fuel supplied at EU airports by 2030 and 35% by 2050. However, many eSAF projects remain unfunded, highlighting the importance of offtake agreements, guarantees and other financial support. South Africa is developing its own financing mechanisms, including the SA-H2 Fund, which reached a R3-billion first close in August 2026 and has provided development funding for projects including green ammonia and green methanol.
Phelan’s FID does not eliminate execution risks. The project must secure reliable renewable electricity, water and biogenic CO2 supplies while managing electrolyzer utilization and construction costs. Its progress will be closely watched as a test of whether South Africa can convert its green hydrogen pipeline into commercially viable industrial and export projects. The key milestones will be construction beginning on schedule, securing sufficient financing and delivering e-SAF production and exports in 2029.
