JOHANNESBURG (miningweekly.com) – Interest in green ammonia supply has recently surged beyond expectation, Hive Hydrogen South Africa reported on Friday, November 13.
Hive Hydrogen is developing the Coega green ammonia project at the deep-water Port of Ngqura in South Africa’s Nelson Mandela Bay.
Driving the burgeoning demand outlook for green ammonia are the increased cost of fossil fuel-derived ammonia, the growing concerns over security of traditional supply chains, as well as hefty, looming carbon taxes.
Hive Hydrogen’s studies pointed to imported ammonia supply shortages for Europe and the Far East increasing substantially further.
Amid the fulfilment of planned ammonia bunkering and coal substitution projects, it is calculated that this year’s three- to four-million tonnes is poised to be majorly multiplied to 75-million-plus tonnes by 2032.
The supply shortage is large enough for 75 more projects of the size of Hive Hydrogen’s Coega green ammonia project to be developed.
Moreover, this shortage would be further compounded by the:
- decommissioning of dirty and ageing ‘grey’ fossil-fuel derived ammonia production plants; and
- the cost and lifespan uncertainties hanging over blue ammonia projects against the backdrop of unproven carbon capture technology, limited storage capacities, volatile gas prices, and doubts over medium- to long-term viability.
In South Africa itself, ammonia production shortages will be faced as early as 2028 when gas supplied from Mozambique runs out. As a consequence, higher cost ammonia imports will thus be needed to supply this region’s large fertiliser and mining explosives industries.
“Green ammonia is seen as the most credible and viable solution to replace dirty grey ammonia needed to manufacture fertilisers and mining explosives and also to become the maritime clean fuel of the future,” Hive Energy CEO and Hive Hydrogen South Africa GM Colin Loubser emphasised in a media release to Mining Weekly.
“We’ve seen more and wider interest in our project in the period since the Africa Green Hydrogen Summit in September than in the previous two years. This has been largely driven by a wider understanding of the strategic and growing importance of a reliable green ammonia supply, changing market forces and maturing clean energy technologies.
“The South African government, led by a committed and very determined Electricity and Energy Minister Dr Kgosientsho Ramokgopa and supported strongly by the Department of Trade, Industry and Competition as well as the ‘Three Capes’ provincial governments, has been tirelessly engaged in catalysing the green hydrogen industry in South Africa, focussing on liberalising energy generation, creating a low-carbon framework to enable responsible but effective re-industrialisation and ensuring electricity transmission capacity and renewable power generation will be accessible and cost reflective,” Loubser added.
Chaired by former Eskom CEO and former Standard Bank chair Thulani Gcabashe, Hive Hydrogen has been working on large-scale green hydrogen and green ammonia development since 2019.
In September, the project was advanced through the awarding of a $9-million front-end engineering design (FEED) contract for the pioneering $5.8-billion Coega green hydrogen ammonia project, which has its own grid-connected large-scale wind and solar PV renewable energy plants totalling 2 930 MW.
The commencement of FEED allows Hive Hydrogen and Técnicas Reunidas to work closely with technology providers, infrastructure partners, government stakeholders, financiers, export credit agencies, and prospective offtakers as the molecule portion progresses towards implementation. The multifaceted initiative is seen as being on the way to creating more than 20 000 employment opportunities.
GLOBAL GATEWAY FLAGSHIP
Hive Hydrogen’s Coega green ammonia project is the EU’s Global Gateway flagship for the establishment of South Africa’s green hydrogen industry as a major part of this country’s Just Energy Transition. The project is seen as “certainly helping to raise the profile of this exciting new industry and investors and lenders are engaging meaningfully now – but full commitment to a cleaner future is needed”, the release stated.
IDC LEADING COMMERCIALISATION STRATEGY
South Africa’s State-owned Industrial Development Corporation (IDC) has also ramped up its resources to ensure the commercialisation of South Africa’s green hydrogen industry.
“The IDC is actively supported by several EU entities who have also committed funding and resources in South Africa to achieve the Just Energy Transition across all the components required and the Green Hydrogen Just Energy Transition Implementation Plan programme management office has now launched its Green Hydrogen Deal Book – where Hive Hydrogen’s lighthouse project features prominently in the country’s investment-ready pipeline.
“The IDC is collaborating with German’s GIZ, Green Hydrogen South Africa, the Industrial Zones Programme, Eskom, Nersa, NTCSA and SANEDI, whose commitment to the development of a competitive, inclusive and sustainable green hydrogen economy in South Africa is providing the structure and backbone needed for success,” the release pointed out.
REGIONAL AND PROVINCIAL COOPERATION
At September’s Africa Green Hydrogen Summit, the strategic value to the ‘Three Capes’ – Eastern Cape, Northern Cape and Western Cape – of the green hydrogen industry featured strongly, and emphasised was South Africa’s renewable energy, resource depth, active policy framework, and embedded infrastructure proving the core value for the export and local supply of green ammonia.
With its integrated production plant, deep-water port, wind and solar PV energy and established grid components, the Coega green ammonia project is leading the charge as one of the most competitive green ammonia project development models globally.
MOMENTUM FAVOURING FUNDING
With the considerable momentum that the green hydrogen and green ammonia industry now has, now is seen as the ideal time for forward-looking investors and funders to step up and support the final stage funding requirements that enable green hydrogen and green ammonia projects to succeed optimally.
Although the Coega green ammonia project has already been substantially derisked by backers Hive Energy, Built Africa and Climate Fund Managers, the scale needed to commercialise fully still requires additional institutional, private and impact funding partners to help conclude the FEED work, to buy out remaining smaller co-developers, and to deliver a bankable, world-class project that provides good returns for its development, investment and operating partners.
The ‘if’ question has now become the ‘when’ discussion and strong investor and funder support is the final step to unlock the full potential of green hydrogen and green ammonia in South Africa.
AUSTRALIA
Meanwhile, in Australia, green ammonia has been transferred to the ammonia-powered dry bulk Fortescue-chartered Mineral Europa vessel in what is seen as a step towards bunkering Fortescue’s vessels with the ammonia that Fortescue, which is best known as an iron-ore producer, produces itself.
“Our Green Pioneer has proven ammonia as a marine fuel around the world, as we continue to advocate for shipping’s transition to green fuels. Working with Pilbara Ports and CMB.TECH, we’ve now shown how a major export port can help power the next era of global shipping,” Fortescue commented on LinkedIn.
CHINA
Reported, too, on LinkedIn, is that China’s green hydrogen megaproject has supplied green ammonia fuel to a large ammonia carrier in a landmark demonstration of the complete green ammonia value chain in operation – from Envision’s 500 MW Chifeng renewable-powered green hydrogen/ammonia production, through logistics and bunkering, to powering a very large ammonia-fuelled ammonia carrier.
China has also approved four-year hydrogen application pilot programmes across five city clusters, including Beijing-Tianjin-Hebei and the Greater Bay Area, as the country seeks to expand the use of hydrogen in transport and industry.
The other three groupings are Northeast China, including eastern Inner Mongolia, linked with the Yangtze River Delta; Xinjiang, linked with the Chengdu-Chongqing economic circle; and the Yellow River Bend region, linked with the Central Plains.
The pilots will focus on hydrogen technology development, industrial applications, fuel cell vehicles and refuelling infrastructure. The aim is to extend hydrogen use beyond transport into sectors such as steelmaking and chemicals, helping to lower costs as well as support industrial decarbonisation.
GERMANY
Last month, Germany’s economy ministry adopted measures to ramp-up the hydrogen market, including launching a hydrogen funding window under the Carbon Contracts for Difference programme.
As a result, at least $1.68-billion will be allocated for hydrogen projects in the 2027 bidding round. The amount may be increased if demand is high. As part of its measures, the government will incentivise the conversion of power plants to hydrogen.
In addition, Bosch is scaling platinum-based proton exchange membrane (PEM ) electrolysis technology for large-scale ammonia projects as part of a development agreement with KBR. The platform is designed for large-scale hydrogen production projects worldwide.
By bringing together Bosch’s PEM technology know-how and KBR’s experience in licensing, engineering, and delivery of complex ammonia plants, the realisation of low-carbon hydrogen projects at scale is expected to be accelerated.
CANADA
Clean Hydrogen president Dr Bruno Pollet has drawn attention to Canada’s evolving hydrogen landscape.
