- The country’s special economic zones could be redesigned as Hydrogen Industrial Hubs to support production, manufacturing and downstream beneficiation.
- The proposed model would combine fiscal incentives with dedicated infrastructure, faster permitting and localisation support.
- Green hydrogen hubs could help attract investment across the hydrogen value chain, including green ammonia and green steel.
South Africa’s special economic zones (SEZ’s) could play a central role in positioning the country as a producer and manufacturer within the global green hydrogen economy, according to the Department of Trade, Industry and Competition’s Acting Chief Director of Special Economic Zones, Shaun Moses.
Speaking during a panel discussion on SEZ policy at the Africa Green Hydrogen Summit in Cape Town, Moses said South Africa should move beyond the traditional SEZ model and establish Hydrogen Industrial Hubs.
“This would position South Africa not only as a producer of green hydrogen, but as a globally competitive manufacturing and beneficiation platform for the entire hydrogen value chain,” he said.
The proposed model would combine the existing benefits of SEZs with production incentives, guaranteed infrastructure, accelerated permitting and support for local manufacturing.
Moses said SEZs could provide an integrated and investment ready environment for hydrogen production, beneficiation, manufacturing, logistics and related industrial activities.
The existing SEZ programme provides an industrial policy framework for supporting manufacturing, attracting investment and promoting industrial growth. However, Moses said fiscal incentives alone would not be sufficient to ensure the competitiveness of green hydrogen projects.
He identified access to dedicated infrastructure, renewable energy, electricity transmission, ports, logistics, industrial clustering and streamlined regulatory processes as essential requirements.
Effective coordination between national, provincial and municipal institutions would also be needed to reduce development risks and improve investor confidence, he said.
“SEZs can serve as strategic drivers for integrating these conditions and reducing project development risks,” Moses said.
An enabling environment would require targeted fiscal and investment incentives to reduce capital and operating costs. It would also need dedicated energy, water, logistics, port and rail infrastructure to support industrial clusters.
Moses said efficient regulatory and investment facilitation mechanisms would be equally important. These could include one stop shops and coordinated permitting processes for hydrogen projects.
The current SEZ incentive framework offers value through a 15% corporate tax rate, customs benefits and Value Added Tax benefits. It also provides a platform for developing industrial clusters focused on green hydrogen, green ammonia, green steel and other downstream industries.
According to Moses, this approach is aligned with South Africa’s Industrial Development Strategy, which aims to promote industrialisation and beneficiation. It also supports the country’s Spatial Industrial Strategy by creating new industrial growth nodes linked to ports, renewable energy resources and logistics corridors.
“If South Africa is serious about becoming a global green hydrogen player, we must move beyond incentives alone,” he said.
Author: Bryan Groenendaal
