The Green Hydrogen Catalyst: Igniting Local Development through Green Trade Enablers

This policy brief argues that South Africa should leverage international interest in green hydrogen to catalyze local socio-economic development and regional integration. It recommends prioritizing trade-focused investments in physical, institutional, and social enablers—specifically port infrastructure, domestic manufacturing of electrolysers, and community-centric social strategies—to ensure the sector benefits the domestic population rather than serving only as an export mechanism.

• South Africa possesses a significant competitive advantage in green hydrogen production due to ideal solar and wind conditions, with estimates suggesting it could be the second-lowest cost producer globally, surpassed only by Chile.
• Inefficient port infrastructure is a primary barrier to South Africa's export ambitions. Port congestion was estimated to cost the country at least ZAR 124 million per day in 2023, and major ports like Gqeberha, Durban, and Cape Town rank poorly in the World Bank’s Container Port Performance Index.
• There is a significant opportunity for South Africa to develop 'green corridors' by supplying green shipping fuels. Demand from ships visiting eight commercial ports could reach 56,000 tonnes of hydrogen by 2030 and 530,000 tonnes by 2050, with an additional 1.3 million tonnes of potential demand from bypass traffic at the Cape of Good Hope by 2050.
• To avoid the 'chicken-and-egg' problem of low demand and high risk, South Africa should prioritize the upstream value chain, specifically the commercial production of fuel cells and electrolysers. Currently, there is no commercial production of these components in the country, despite technical potential.
• Regional cooperation in Southern Africa is essential to reduce investment risks and avoid redundant infrastructure. A 2024 Memorandum of Understanding between South Africa and Namibia explores a cross-border green hydrogen pipeline, which could be the first of its kind in Africa.
• Social acceptance is a critical risk factor, with communities like Richtersveld expressing concerns over transparency. A major point of contention is water scarcity; the brief suggests that green hydrogen producers should be required to oversize desalination plants to provide water to local utilities as a community benefit.
• Financial sustainability is a concern as the green hydrogen sector is part of the Just Energy Transition Investment Plan (JET-IP), but only 4% of those funds are grants, with the remainder being loans that may impact debt sustainability.

APA

South African Institute of International Affairs (2025). The Green Hydrogen Catalyst: Igniting Local Development through Green Trade Enablers. https://saiia.org.za/research/the-green-hydrogen-catalyst-igniting-local-development-through-green-trade-enablers/

Chicago

South African Institute of International Affairs. The Green Hydrogen Catalyst: Igniting Local Development through Green Trade Enablers. 2025. https://saiia.org.za/research/the-green-hydrogen-catalyst-igniting-local-development-through-green-trade-enablers/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=The Green Hydrogen Catalyst: Igniting Local Development through Green Trade Enablers |date=12 May 2025 |url=https://saiia.org.za/research/the-green-hydrogen-catalyst-igniting-local-development-through-green-trade-enablers/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2025green, author = {{South African Institute of International Affairs}}, title = {{The Green Hydrogen Catalyst: Igniting Local Development through Green Trade Enablers}}, institution = {South African Institute of International Affairs}, year = {2025}, month = may, url = {https://saiia.org.za/research/the-green-hydrogen-catalyst-igniting-local-development-through-green-trade-enablers/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }