Lessons learned from advising on the world’s largest industrial green hydrogen facility

Global law firm Baker McKenzie recently advised Advanced Clean Energy Storage along with Mitsubishi Power Americas and Magnum Development in the United States Department of Energy’s USD504.4-million loan guaranty to develop the world’s largest industrial green hydrogen facility in central Utah in the United States.

Closed on June 3, 2022, the loan highlights the Biden Administration and the Department of Energy’s (DOE) commitment toward supporting the clean hydrogen sector. It also helps create a viable market for hydrogen and will make it scalable in the western United States and electrical grid, creating the fundamental infrastructure necessary to deploy this zero-carbon energy storage source.

“Supporting ACES Delta to reach financial closing on the DOE loan is part of the unique opportunity to be involved in such a transformational energy transition project in the United States and globally,” said James P. O’Brien, chair of Baker McKenzie’s Global Projects Practice. “To see ACES Delta transform its vision of hydrogen energy storage to the launch of this project is really exciting.”

Christopher Jones, head of Baker McKenzie’s Hydrogen Group, added: “With a growing number of hydrogen projects taking place across the globe, being a part of such a flagship project enhances our legal insights and industry expertise for our team to continue to excel in this space. It demonstrates our continued global leadership in the clean energy technology sector for the past 20 plus years.”

Key issues and lessons learned

Referencing Baker McKenzie’s report – Shaping Tomorrow’s Global Hydrogen Market, James P. O’Brien and Christopher Jones list some of the lessons learned and key issues to consider when considering an investment in hydrogen.

Hydrogen is now playing a crucial role in making an essential and fundamental change to our energy systems. It constitutes a key part of the solution to climate change.

Despite regulatory challenges and legal complexity, there are numerous, important opportunities for businesses.

Closing the gap between cost and revenue in hydrogen projects is possible by making smart use of government support in the form of public funding and public-private partnerships.

Many governments are already supporting the growth of hydrogen using innovation funds, mandatory targets and public-private partnerships, and this support is already showing results. ­

Many countries have adopted (or have committed to do so) hydrogen-specific strategies.

One of the key challenges is decarbonizing hydrogen production. This will entail using (i) renewable (and nuclear) electricity to produce green hydrogen and (ii) natural gas combined with CO₂ storage or conversion into solid carbon to produce blue hydrogen.

Both of these production methods for decarbonized hydrogen are expected to play a major role in meeting the world’s future energy needs. Nonetheless, blue hydrogen could have the advantage in the near term.

Without government intervention through emission trading schemes, energy taxes or similar obligations on grey hydrogen users today, and on those that will use hydrogen when obliged to decarbonize, there will be no significant market for green and blue hydrogen in the short to medium term. 

Since using carbon capture, utilisation and storage (CCUS) is already the cheapest low-carbon hydrogen production method, government support could quickly make this into reality. In this way, the rise in demand for hydrogen could very soon be met using CCUS-based hydrogen production.

Since hydrogen markets will grow exponentially in the mid- and long-term, companies that invest today in hydrogen will be able to capture this growth, become technology leaders and shape the future of the business.

However, there are still multiple barriers to the widespread development of decarbonized hydrogen and each investment will face challenges in the form of policy, regulatory, economic and financial barriers.

The speed of deployment of hydrogen in coming years is expected to vary between sectors and countries. These variations come partly from the different level of maturity or adoption of the technology required for decarbonized hydrogen development, either globally or in specific regions. 

Investors should assess (i) the effect of existing regulatory barriers on any new investment or project, (ii) the likelihood of such barrier disappearing for a particular market and within a particular timeframe, and of course (iii) the availability of public support to de-risk the investment when needed.

To best use available government support, companies should therefore understand (i) which countries provide the most and best focused funding or investment support and (ii) what types of projects governments are likely to support.

Companies contemplating a specific investment in their own region and field of expertise should carry out a thorough analysis of funding and financing opportunities. However, understanding regional and sectoral funding trends as well as expert recommendations can already provide some insight as to government-funding and financing patterns.

Africa developments

Kieran Whyte, Partner and Head of Projects at Baker McKenzie in Johannesburg, and Lamyaa Gadelhak, Partner and Co-Head of the Banking & Projects Practice Group, Helmy, Hamza & Partners, Baker McKenzie Cairo, outline some recent developments in the hydrogen sector in Africa.

In February 2022, the South African Hydrogen Society Roadmap (HSRM) was published by the South African Department of Science and Innovation, marking an important milestone in the launch of South Africa’s hydrogen economy.  The HSRM was developed by the Department of Science and Innovation, Hydrogen South Africa (HySA), and government and industry stakeholders. It focuses on national ambitions, sector prioritization, the overarching policy framework and the macro-economic impact of the hydrogen economy throughout South Africa. 

The Roadmap is aligned with the country’s Integrated Resource Plan, the Integrated Energy Plan and the Renewable Energy Policy, all of which acknowledge the important role of hydrogen in South Africa’s just energy transition, which aims for net zero emissions by 2050.

The HSRM outlines a number of targets, including the creation of an export market for green hydrogen and ammonia, the implementation of a Centre of Excellence in manufacturing for hydrogen products, the development of domestic hydrogen supply chains, the production of 500 kilotons of green hydrogen by 2030, and a long term target of 15 GW power generation based on hydrogen by 2040. Further targets include a one megawatt small-scale electrolysis facility piloted by 2025, and the deployment of 10 GW electrolysers in the Northern Cape and 1.7 GW electrolysers in the Hydrogen Valley by 2030.

The government of Egypt has expressly recognized the production, storage and export of green hydrogen and green ammonia among the areas falling within the state’s economic development strategy.

It has also passed a decree that would allow green hydrogen and green ammonia projects to benefit from a wide range of state support under the country’s existing Investment Law No. 72 of 2017, including tax incentives.

This is a key development for Egypt’s hydrogen economy. We expect that it will stimulate private investment and the development of new green hydrogen and ammonia projects in the country.

In May 2022 Egypt, Kenya, Morocco, Mauritania, Namibia and South Africa launched the Africa Green Hydrogen Alliance, with the intention to foster collaboration and ensure the continent is able to lead in the development of green hydrogen for energy transition.

Empowering African countries to participate fully in the green hydrogen market has tremendous potential to improve access to cost-effective power for all African citizens. African economies will also reap the benefits of the rapidly increasing global demand for sustainable, decarbonised power. However, infrastructure gaps, and policy, regulatory and funding barriers must be urgently addressed through government support and incentives.

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Southern Africa marked as major green exporter on roadmap for Hydrogen

In March this year, the South African Department of Science and Innovation (DSI) published a Hydrogen Society Roadmap for South Africa (HSRM) outlining a national hydrogen strategy to realise domestic energy security needs, while also positioning the country to export green hydrogen and ammonia to Europe and Asia.

According to Jackwell Feris, Director at commercial law firm Cliffe Dekker Hofmeyr (CDH), the development of the hydrogen economy in Africa will support effective broad global decarbonisation, allowing countries to meet their climate goals and create sustainable economic growth for African countries and the rest of the world. “There are enormous opportunities for Africa to be a key player in the clean hydrogen value chain,” says Feris. “In fact, several regions have the potential to develop into major global export hubs for hydrogen and other areas with the potential to provide domestic demand for end-use applications of hydrogen.”

From a Southern African perspective, he says this region has favourable solar conditions for the production of green hydrogen, with countries like Namibia and South Africa being ideally situated to become export hubs for green hydrogen.

“This is why it is critical that South Africa and Namibia push to become one of the first movers in this market,” says Feris. “There are already a number of international jurisdictions like South America and Australia who are already in a good position to do the same.”

Feris says South Africa needs to expedite the process in order to secure the demand, which begins with securing policy and regulatory frameworks that are attractive to investors but also balance the current and future needs of the country.

Feris points to Spain as a perfect example of why policies and regulations are so important. In 2006, the Spanish government implemented a programme called “The sun can be yours” in which it encouraged small-time investors to buy into solar farms throughout Spain. While this was successful for some time, the policy was not robust enough and the Spanish government ended up reducing its subsidies, which become a red flag for investors who in turn made claims against the government.

“We cannot develop this new market into new economic territory without due consideration for the economic needs and restrictions of our national goals and priorities. The system needs to be sustainable from the word go.”

Hydrogen is going to affect the entire global economy. From the different forms of hydrogen, they all need to shift to a greener form of energy – which is hydrogen.

The competitive advantage of Namibia is that there is more land and fewer people, so the natural move would be to become an export market.

Looking at what the global commitments are in terms of the 2021 United Nations climate change conference, COP26, is that there will be a bigger push for hydrogen, and  Africa most definitely has a role to play in this. If Africa collaborates to create this industry across jurisdictions for African growth, we can attract investment while decarbonising the global economy.

Is it realistic for South Africa to do this? Director at CDH Margo-Ann Werner says in terms of exporting hydrogen, this would have to be a collective effort by the government and private sector, and Sasol has already taken the lead on hydrogen creation. If we want investors to invigorate growth in this market, it all hinges on creating an enabling policy framework. In a South African context, we do have a few gears that will enable a hydrogen economy.

The country is already the world’s largest producer of Platinum Group Metals (PGM), which are one of the main ingredients in the production of green hydrogen, and is also well endowed with available land and renewable resources to provide the energy sources for green hydrogen production.

Existing local infrastructure will allow for the production of blue, grey, black, and brown hydrogen, with the possibility of pink hydrogen arising. This puts South Africa in a unique position to gain a competitive advantage in harnessing hydrogen to create a whole new electricity market, which South Africa desperately needs.

“We are seeing drives in government that are specifically focussed to push the infrastructure drive and securing the resources needed to facilitate security of supply, and conservation of water”, concludes Werner.  “It’s not going to be an easy road. It is going to be complex and dynamic with a lot of moving parts across private and public sectors. We still need more clarity, more security, and more commitment, but it will be worth it”.

READ MORE ON PAGE 44 OF GREEN ECONOMY JOURNAL 52
READ MORE IN GREEN ECONOMY JOURNAL 49 ON PAGE 28
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Cost of petrol surges but SA lags in uptake of electric cars

In the past week, the cost of petrol nudged up against the R25 a litre mark, so South Africans can be forgiven for considering alternatives to cars that run on conventional fuel.

by Ethan van Diemen, Daily Maverick

According to a statement released by the Department of Mineral Resources and Energy, the average price of Brent crude oil had increased from $104.7 to $115 a barrel. The department said the main contributing factors were the increasing demand amid the summer driving season in the northern hemisphere and the European Union’s discussions on possible sanctions on crude oil and petroleum products from Russia.

With the petrol price seeing such a big increase and the effects of climate change already raining down on South Africa, a shift from the internal combustion engine could not come soon enough for road users.

While these are unlikely to ameliorate the more pernicious impacts and cost implications of our dependence on hydrocarbons, there are some alternatives in the pipeline, if escaping the ever-rising cost of petrol is your main concern. 

Green hydrogen

South Africa is betting big on so-called green hydrogen as a way to both grow and decarbonise hard-to-abate sectors of the economy. 

Hydrogen is the lightest and most abundant known element in the universe. It can also serve as an alternative, emissions-free transport fuel when used to power fuel cells. 

Hydrogen is considered green when it is produced using renewable electricity to split water into hydrogen and oxygen using electrolysers.

Fuel cells work by combining hydrogen and oxygen in an electrochemical process that generates electricity, with the only byproduct being water.

In a report compiled by global information consultancy IHS Markit titled “The Super H2igh Road Scenario for South Africa”, a “feasible scenario” is laid out that the country could cut its greenhouse gas emissions by 75% by 2050 if it were to take advantage of the opportunities presented by the hydrogen economy.

Business Maverick recently reported that Anglo American Platinum unveiled a prototype of the world’s largest hydrogen mine haul truck — weighing in at 220 tonnes unloaded. It can carry a load of up to 290 tonnes and it does it all without any greenhouse gas emissions. 

While this prototype offers a glimpse into a low-emissions future for mobility, having this technology widely adopted for passenger vehicle use in South Africa requires a level of investment in renewable energy generation, hydrogen production, hydrogen storage, hydrogen transportation and hydrogen refuelling sites that just does not exist at present. 

Electric mobility

Fuel cell electric vehicles (FCEV), however, are only recently emerging from the shadows of their more well-known counterparts: electric vehicles (EVs) and variants thereof. 

These vehicles, whether battery-electric, plug-in hybrid or hybrid-electric, are increasingly being adopted in the developed world where incentives and the necessary infrastructure to support these vehicles exist.

Battery-powered electric vehicles (BEVs) use lithium-ion batteries to power their operation and, like their hydrogen power counterparts, they release no greenhouse gas emissions and are less harmful to the environment when they are charged using electricity generated from renewable sources.

While perhaps the most desirable option, especially as petrol prices skyrocket, South Africans have limited options in this regard.

Trade & Industrial Policy Strategies (Tips), an independent economic research institution, in a policy brief called “Towards an inclusive rollout of electric vehicles in South Africa”, explained that “the rollout of EVs in the passenger car market is influenced by a series of factors. These range from domestic structural inequality to automotive market dynamics”.

They continued that “the number of EVs available in South Africa remains limited. The lack of local supply is particularly striking in the entry- and mid-level market segments, with most available models competing in the high-end to niche segments. Only seven BEVs were available on the local market at the end of 2021, all at the high end of the market.

“The availability of hybrid vehicles is slightly higher, with 23 HEVs and 11 PHEVs having registered at least one sale by the end of 2020. No Fuel Cell Electric Vehicle is currently on offer,” the policy brief reads.

The International Energy Agency recently released a Global EV Outlook report. Among others, it noted that “sales of electric cars (including fully electric and plug-in hybrids) doubled in 2021 to a new record of 6.6 million, with more now sold each week than in the whole of 2012”.

It showed that the number of electric cars on the world’s roads by the end of 2021 was about 16.5 million — triple the amount seen in 2018.

Solar energy

Solar-powered cars are another alternative to the internal combustion engine that seems suited to the South African environment, but is well away from being available for mass adoption as a passenger vehicle. 

The Mail & Guardian reported in February that the Tshwane University of Technology engineering and built environment faculty travelled from Pretoria to Swakopmund, Namibia, in the SunChaser 4, a solar-powered vehicle. 

“The fourth-generation solar electric car covered more than 2,153km on highways using solar panels installed on the vehicle’s flat surface,” they said at the time. 

While offering a glimpse into an alternative — albeit underexplored — means of transport, it is unlikely that South Africans are going to travel along the country’s roads in anything resembling the SunChaser in the near future.

While some of the attempts, such as the one mentioned above, are laudable, electric mobility in general is not without its issues in the South African context. 

An op-ed first published by GroundUp notes that EVs, “due to the rare earth metals of their batteries and their greater average weight, have a larger manufacturing footprint than equivalent internal combustion engine vehicles”.

Moreover, the majority of South Africa’s energy generation is powered by the carbon-intensive process of burning coal — thereby all but eliminating the environmental benefit of the vehicle’s alternative drivetrain. 

Without many FCEV options and associated infrastructure — and until and unless South Africa thoroughly reforms its electricity generation and distribution regime — electric mobility is unlikely to steer road users away from the costs and environmental implications of the internal combustion engine any time soon.

This article first appeared on Daily Maverick and is republished here under a Creative Commons license.

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Anglo American unveils a prototype of the world’s largest hydrogen-powered mine haul truck

A VITAL STEP TOWARDS REDUCING CARBON EMISSIONS OVER TIME

Anglo American plc (“Anglo American”) unveils a prototype of the world’s largest hydrogen-powered mine haul truck designed to operate in everyday mining conditions at its Mogalakwena PGMs mine in South Africa.

The 2MW hydrogen-battery hybrid truck, generating more power than its diesel predecessor and capable of carrying a 290-tonne payload, is part of Anglo American’s nuGen™ Zero Emission Haulage Solution (ZEHS). nuGen™ provides a fully integrated green hydrogen system, consisting of production, fuelling and haulage system, with green hydrogen to be produced at the mine site.

nuGen™ is part of FutureSmart Mining™, Anglo American’s innovation-led approach to sustainable mining – which brings together technology and digitalisation to drive sustainability outcomes, including our commitment to carbon-neutrality across our operations by 2040.

Duncan Wanblad, Chief Executive of Anglo American, said: “nuGen™ is a tangible demonstration of our FutureSmart Mining™ programme changing the future of our industry. With diesel emissions from our haul truck fleet accounting for c.10-15% of our total Scope 1 emissions, this is an important step on our pathway to carbon neutral operations by 2040. The mining industry is playing a considerable role in helping the world decarbonise, both through our own emissions footprint and the metals and minerals that we produce that are critical to low carbon energy and transport systems.

“Over the next several years, we envisage converting or replacing our current fleet of diesel-powered trucks with this zero-emission haulage system, fuelled with green hydrogen. If this pilot is successful, we could remove up to 80% of diesel emissions at our open pit mines by rolling this technology across our global fleet.”

Tony O’Neill, Technical Director of Anglo American, commented: “We are incredibly proud of what our team, working with expert partners, has achieved in under three years. This is truly a world-class innovation and bears testament to our technical vision and determination to deliver a cleaner and smarter future for mining.

“It is these game-changing innovations that are exactly why we began our FutureSmart Mining™ journey in 2014, knowing how much of a difference we can make, including in the energy transition and across our societal footprint. Innovative, clean and independent power systems, such as our nuGen™ ZEHS project, offer a significant part of the emissions solution.”

Natascha Viljoen, CEO of Anglo American Platinum, said: “PGMs play an essential catalytic role in many clean-air technologies, including related to hydrogen production and hydrogen-fuelled transportation. As part of our market development work, we have for some years been working towards establishing the right ecosystem to successfully develop, scale up and deploy hydrogen-fuelled solutions.

“Hydrogen has a significant and wide-ranging role to play in achieving a low carbon future – particularly as an energy carrier enabling the development of a renewables-based power generation system. We are particularly excited about the potential of nuGen™, amongst other opportunities, as we work to champion the development of South Africa’s Hydrogen Valley.”

Anglo American has been a longstanding champion of the potential offered by the hydrogen economy, recognising its role in enabling the shift to greener energy and cleaner transport. The hydrogen economy provides an opportunity to create new engines of economic activity. With a combination of abundant renewable energy sources (i.e. solar and wind), and as the world’s largest producer of PGMs, hydrogen is a strategic priority for South Africa and presents a significant opportunity for economic development, including the creation of new jobs and the development of the PGMs sector, while also contributing to South Africa’s decarbonisation objectives.

Sébastien Arbola, Executive Vice President in charge of Thermal Generation, Hydrogen and Energy Supply at ENGIE said: “At ENGIE, we realise the importance of green hydrogen in the decarbonisation of heavy-duty mobility, and we are dedicated to helping industry players accomplish their carbon neutrality goals. We are delighted to partner with Anglo American to provide renewable hydrogen for their proof of concept. Through this partnership, we aim to unlock the potential of green hydrogen in South Africa and pave the way for the decarbonisation of the mining industry. “

South Africa’s Hydrogen Valley

In South Africa, the Department of Science and Innovation (DSI) and the South African National Development Institute (SANEDI), in partnership with Anglo American, Bambili Energy, and ENGIE, are looking into opportunities to create a Hydrogen Valley. The proposed hydrogen valley will stretch approximately 835 kilometres from the platinum group metals-rich Bushveld geological area in Limpopo province, along the industrial and commercial corridor to Johannesburg and to the south coast at Durban. The nuGen™ Zero Emission Haulage Solution is one of the first projects for South Africa’s Hydrogen Valley.

A feasibility study for South Africa’s Hydrogen Valley published in October 2021 identifies three hubs – Johannesburg, extending to Rustenburg and Pretoria; Durban, encompassing the city itself and Richards Bay; and Limpopo province centred around Anglo American’s Mogalakwena PGMs mine – with a fundamental role to play in integrating hydrogen into South Africa’s economy, and in establishing South Africa and its abundant renewable energy resources as a strategically important centre for green hydrogen production. Nine key pilot projects have also been identified across these hubs and are recommended to be prioritised by developers. They span the transport, industrial, and construction sectors.

A world first developed by Anglo American with its partners

For the nuGen™ project, Anglo American has worked with some of the world’s leading creative engineering and technology companies, such as ENGIE, First Mode, Ballard and NPROXX, to: 

  • Design, build, and test a 1.2MWh battery pack, as the haul truck system uses multiple fuel cells that deliver up to 800kW of power, combining to deliver a total of 2MW of power.
  • Design and implement a software solution to safely manage power and energy between the fuel cells, batteries, and vehicle drivetrain.
  • Develop the power management and battery systems from the ground up, enabling us to tailor the system to each mine and improve overall efficiency by designing in energy recovery as the haul trucks travel downhill through regenerative braking.  
  • Build a hydrogen production, storage, and refuelling complex at Mogalakwena that incorporates the largest electrolyser in Africa and a solar plant to support the operation of the haul truck.  

“The impact of our nuGen™ project goes far beyond our operations. We believe that the emerging hydrogen sector has the potential to dramatically improve the growth and development of many economies by creating new industrial value chains and economic generation opportunities. Growing the hydrogen economy will revolutionise not just Anglo American’s operations, but all mining and many other industries – and ultimately shape a better, cleaner world,” concluded Wanblad.

You can learn more about Anglo American’s nuGen™ Zero Emission Haulage Solution (ZEHS) here: https://southafrica.angloamerican.com/our-difference/futuresmart-mining/nugen

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Minister Blade Nzimande: Launch of Hydrogen Society Roadmap

Address by the Minister of Higher Education, Science and Innovation, Dr Blade Nzimande, on the occasion of the launch of the Hydrogen Society Roadmap

17 Feb 2022

I am grateful to be joining you this afternoon on this occasion of the launch of the Hydrogen Society Roadmap (HSRM).

We are holding this important launch of the Hydrogen Society Roadmap at a time when our country and the world is faced with the fourfold challenges of:

  1. The Covid 19 pandemic;
  2. Persisting and stubborn economic crises, and its associated challenges of poverty, inequality and unemployment;
  3. The crises facing poor families, households and communities to make ends meet – the struggle to sustain life and livelihoods; and
  4. Climate Change.
     

This launch also takes place at a time when South Africa is also focusing on extraordinary measures of economic recovery and reconstruction to achieve inclusive growth following the devastation caused by Covid-19 and economic challenges.

Indeed the depth of the crisis caused by the Covid-19 pandemic has sharpened our resolve to rededicate ourselves to address our massive socio-economic challenges.

At the centre of our Reconstruction and Recovery Plan (ERRP), is the creation of sustainable jobs and livelihoods.

Our determination is to get our people back into the jobs they lost during the pandemic and  create new ones. This means that we want to broaden the participation of all South African’s in an inclusive economic.

As government we are determined to create an environment which encourages investment, the  creation of employment and skills needed for our economic growth and development.

I therefore view the launch of the Hydrogen Society Roadmap as amongst the critical and leading instruments towards our economic recovery and developing our economy.

Ladies and gentlemen

The South African hydrogen economy journey started in 2007 when Cabinet approved the national hydrogen and fuel cells research, development and innovation (RDI) Strategy (HySA Strategy).

The HySA Strategy is currently implemented by the Department of Science and Innovation (DSI) through the 15-year Hydrogen South Africa Programme.

The HySA Programme, now on its 13th year of implementation, has made significant contribution towards the creation of a Hydrogen Economy in South Africa.

This has been achieved through the creation of knowledge, technological expertise and human resources development.

During the 2019/20 financial year, the HySA Programme underwent its second five-year review, which recommended the development of an overarching Hydrogen Society Roadmap (HSRM).

In September 2020, the DSI initiated a process to develop the HSRM in collaboration with key relevant departments as well as the private sector and civil society through a consultative process, which culminated in a stakeholder collaboration workshop on 14 July 2021.

This led to the Cabinet approval of the Hydrogen Society Roadmap on the 14th  September 2021.

The implementation of this Roadmap is expected to support inclusive growth and assist government to reduce unemployment, poverty and inequality.

In South Africa, hydrogen is extensively used in the chemical and fuel-refining sectors, but it is currently produced mainly from non-renewable sources such as coal and natural gas.

Was is concerning is that hydrogen and fuel cell technologies (HFCT) are currently used in very few industrial activities in our country.

However, the use of hydrogen and fuel cell technologies is likely to expand significantly in future, driven by both mobile and stationary applications, as well as its use in industrial processes such as ammonia and steel production.

In addition to the renewable resources and available land to build the required renewable energy plants, South Africa has comparative advantage in that the country is home to 75% of the world reserves of the platinum group metals (PGMs).

The PGMs such as platinum, ruthenium and iridium are key components in fuel cell catalysts and electrolysers for green hydrogen production.

In addition, South Africa has a unique and patented Fischer-Tropsch process owned by Sasol, which gives South Africa a competitive edge in the production of liquid fuels based on the hydrogen production route.

Opportunities exist for direct replacement of the hydrogen from natural gas by green hydrogen.

For example, with the existing gas-to-liquids facility operated by PetroSA, as well as the existing port infrastructure located from the east coast all the way to the west cost of the country, this basic infrastructure can be modified and expanded to supply hydrogen into the domestic and international markets.

South Africa currently produces 2% of the global demand for hydrogen, mostly made from natural gas by Sasol.

Given the projected global demand for green hydrogen, South Africa has the opportunity to convert its current global supply to green hydrogen and the potential to increase the country’s share of the green hydrogen market.

As a country, South Africa has good trading relations with the countries that are looking to import green hydrogen.

These include the European Union broadly and Germany in particular, Japan, South Korea and China.

According to the recently launched South African Hydrogen Valley Feasibility Study Report, the average cost of green hydrogen will be around USD 4 (EUR 3.5) per kg by 2030 along the Platinum Valley corridor, representing a green premium of USD2-2.5 per kg above grey hydrogen, produced from natural gas.

The Platinum Valley Corridor starts from Anglo American Platinum’s Mogalakwena Mine in Limpopo, through Pretoria and Johannesburg down to Durban, passing through the N1 and N3.

It is expected that by implementing the catalytic projects identified in the South African Hydrogen Valley Feasibility Study Report, the green premium could be lowered to enable green hydrogen to be at parity with grey hydrogen.

Ladies and gentlemen

As part of developing the Roadmap, the DSI, in collaboration with other stakeholders, identified projects or studies that will be implemented in parallel to kick-start the development of the Hydrogen industry in South Africa.

For instance, the Department of Trade, Industry and Competition, is developing a National Green Hydrogen Commercialisation Strategy that will give confidence to investors that South Africa is a destination for investment in the Hydrogen Economy.

The following catalytic projects have been identified as key to kick starting the implementation of the Roadmap:

Platinum Valley

The Department’s hydrogen valley partnership with Anglo American, Bambili Energy and ENGIE is an example of leveraging investments made in the Hydrogen South Africa Programme to create mechanisms for the uptake of publicly financed intellectual property and supporting small, medium and micro enterprises (SMMEs).

Estimates place the potential gross domestic product (GDP) impact, direct and indirect, of H2 projects in the country at $3,9 billion to $8,8 billion, if the full vision of the hydrogen valley is realised.

This project could bring an additional $900 million to $2,000 million in tax revenue into South Africa’s coffers by 2050.

Limpopo Science and Technology Park

The DSI commissioned a joint study with the Limpopo Economic Development Agency on the role of hydrogen and hydrogen fuel cells to power data centres that will be installed at the Limpopo Science and Technology Park.

While the use of diesel generators to power data centres is the standard practice, recently the move towards stationary fuel cells for uninterrupted power supply has gained momentum.

The CoalCO2-X RDI Programme

The CoalCO2-X Programme aims to use renewable or green hydrogen and pollutants (CO2, SOx, NOx etc.) contained in the flue gas from coal fired boilers to make value added products that can support the transition to a decarbonized energy system and assist the country to meet its emission reduction goals while also ensuring a Just Energy Transition.

To date, the DSI has provided R50 million to kick-start the CoalCO2-X RDI Programme and is looking to demonstrate the flue gas conversion technology at a cement plant in collaboration with PPC Cement.

To ensure that the implementation of the HSRM is successful, a Monitoring, Evaluation, and Learning Framework (MEL) has been drafted to provide the means to monitor progress and evaluate the performance.

A detailed Monitoring, Evaluation, and Learning Framework (MEL) framework document, together with some baseline data is expected to be completed by April 2022.

South Africa’s geography with wide open spaces coupled with port infrastructure creates the environment for ensuring that hydrogen and ammonia produced with renewables can be readily shipped to other countries in the world.

The HSRM identifies the following high-level outcomes for the South African Hydrogen Economy:

The creation of an export market for green hydrogen and ammonia

In this regard, a key outcome of the HSRM is the creation of an export market for the South African green hydrogen.

The demand from international buyers for the South African green hydrogen will be determined by cost competitiveness, confidence in the South African hydrogen market, and an enabling export infrastructure;

The green and enhanced power and buildings sector

In this regard, hydrogen is capable of contributing to the achievement of a decarbonised and enhanced power sector by providing renewable energy storage and green power to the main electricity grid, thus improving overall grid stability;

The decarbonisation of Heavy-Duty Transport

In this regard, the HSRM will support the objective of decarbonisation of transport by 2050.

The initial focus will be road transport, which accounts for the majority of transport emissions and where the technology is most developed to use Hydrogen to power heavy duty vehicles.

Rail, shipping and aviation will be addressed in the medium term (2025-2030);

The decarbonisation of Energy Intensive Industry

In this regard, the HSRM will support the objective of decarbonisation of industry by 2050.

The initial focus will be on the steel, mining, chemicals, refineries and cement sectors, which together account for the majority of energy used in industry; and

Local manufacturing of hydrogen products and fuel cell components

In this regard, the establishment of a manufacturing sector for Hydrogen products and components is a key outcome for the HSRM.

The manufacturing sector will support the transition from internal combustion engine (ICE) to electric vehicle (EV) manufacturing, produce products for export and will contribute to the beneficiation of South African minerals through the supply of value added components in the Hydrogen value chain.

In addition, the HSRM identifies the production, storage and distribution of hydrogen; RDI as well as gender, equality and social inclusion (GESI) as important cross-cutters within the Hydrogen Economy.

More importantly, these are areas where potential interfaces could be explored to create a truly inclusive Hydrogen Economy for the country.

Next Steps

Today we are here to celebrate, but with an understanding that hard work is ahead of us.

The DG’s in his presentation will highlight the 70 key actions that have been identified by stakeholders.

The HSRM articulates the roles that all these stakeholders (comprising of government, industry, academia and civil society) are expected to play in implementing the action plan.

Stakeholders will be expected to mobilise resources through partnerships and create an ecosystem where investment decisions can be made to unlock the socio-economic benefits that can accrue through the integration of hydrogen and fuel cell technologies in various sectors of the economy.

Given the complex and extensive requirements for the implementation the HSRM, it will be enabled by a team of experts, from across industry, SOEs, academia and government, that have been assembled to ensure that the identified 70 key actions are completed as soon as possible to create an enabling environment for investment.

We have also established a partnership with the United Nation Industrial Development Organisation (UNIDO) that will assist with creating an agile, effective and relevant National Hydrogen Energy Centre that will institutionalise the implementation of the Hydrogen Society Roadmap.  

UNIDO has been working with governments, business associations and companies to solve industrial problems for more than 50 years, earning a reputation as the world’s most experienced industrial problem solver, as well as a neutral and honest broker in promoting cooperation and coordination among countries around the world.

UNIDO is fully committed to contributing to the achievement of the Sustainable Development Goals (SDGs), in particular Goal 9 focusing on Infrastructure, Industry and Innovation.

As South Africa we joined UNIDO as a Member State on 24 October 2000.    

Ladies and gentlemen

In conclusion, if South Africa fully implements the HSRM, within a few years, at least 20 000 new jobs will be created in South Africa as part of the adoption of the Hydrogen economy.

My Department of Science and Innovation and Department of Higher Education and Training are working together to scale up training and reskilling programmes across South Africa to ensure that the requisite infrastructure, curriculum and lecturers are in place to educate the next generation of employees and participants for the hydrogen economy.

The Department of Science and Innovation is working with the private sector partners to develop an updated Research Development and Innovation Strategy that will support the aspirations to have a vibrant domestic manufacturing sector for fuel cell components.

A number of MoUs have been signed with leading energy companies both in the private and State-owned to co-fund and co-create future technologies for the hydrogen economy.

In closing, let me first thank the Director General, Dr Phil Mjwara for ensuring that the officials of the Department as well as the other members of the National System of Innovation have worked to ensure the successful implementation of the HySA Strategy

They have ensured that through the Hydrogen Society Roadmap we have levelled up our efforts to the full participation of private sector, other government departments and civil society and academia in securing a clean, affordable and sustainable energy future for South Africa.

I want to express my gratitude to all of you.

I want to assure you today that government will continue to create an enabling environment for the implementation of the roadmap.

We will also focus on more attention on shovel ready projects such as those identified with the Platinum Valley Initiative.  

We have a huge task ahead, but the level of commitment that you have thus far demonstrated indicates that there is no challenge which is unsurmountable.

As the Minister of Higher Education, Science and Innovation, I therefore launch the Hydrogen Society Raodmap.

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Blade Nzimande launches hydrogen roadmap to a greener future for South Africa

South Africa has much catching up to do when it comes to the development of a green hydrogen economy. But this week’s launch of the country’s hydrogen roadmap shows that in this regard, government and the private sector are very much in alignment, even if one wants to move faster than the other.

By Sasha Planting

South Africa’s Hydrogen Society Roadmap was released by the Minister of Higher Education, Science and Innovation Dr Blade Nzimande on Thursday.

The roadmap, which was approved by Cabinet last September, provides the framework necessary to develop and integrate hydrogen-related technologies across various sectors of the South African economy, in the process enabling the just transition away from coal and stimulating economic recovery. 

It was developed by the Department of Higher Education, Science and Innovation (DHSI) and Hydrogen South Africa (HySA), with contributions from more than 100 other industry stakeholders. The plan has been in the making since the department launched HySA in 2008 and mandated it to research the possibilities for a hydrogen economy in SA.

“The creation of jobs is at the heart of our economic reconstruction and recovery plan,” said Nzimande at the launch of the roadmap. “We need to bring back some jobs and create new ones. We want to create an environment that encourages investment, skills development and economic recovery. This roadmap is a critical part of that.” 

Green hydrogen is essential in South Africa’s new energy mix due to its important role in combating climate change and delivering on decarbonisation targets. 

“This is a timeous initiative,” says Joel Netshitenze from the Mapungubwe Institute for Strategic Reflection. “It is one that will propel SA towards a resilient and thriving hydrogen economy.” 

The roadmap, which identifies and prioritises nine catalytic programmes for development, targets the development of a competitive hydrogen economy by 2050, says Dr Rebecca Maserumule, chief director for hydrogen and energy at the DHSI.

“Having a roadmap is the first part of the pillar, the second is supporting demand creation in order to stimulate the development of the sector and mitigate investment risks, and lastly we must harmonise standards to ensure that the products we sell can be sold globally,” she says.  

The sectors include the decarbonisation of the heavy-duty transport sector; the decarbonisation of energy-intensive industries like iron and steel, chemicals, refining, mining and cement; the creation of an export market for green hydrogen and ammonia; and the creation of a manufacturing sector for hydrogen products and components.

“The focus on local manufacturing is essential if we are to create jobs and support the transition away from fossil fuels in a way that is inclusive,” she says. 

There has been a lot of work done to ensure the plan comes together. The Ministry of Trade, Industry, and Competition is, for instance, reviewing its Critical Infrastructure Programme, to assist in alleviating some of the infrastructure costs associated with hydrogen production, fuelling and transport facilities.

And Anglo American, Bambili Energy and Engie, in partnership with the SA National Development Institute, DHSI and HySA, released the results of a feasibility study, dubbed the Hydrogen Valley Project, which aims to transform South Africa’s Bushveld complex, and a larger region between Johannesburg and Durban, into a hydrogen valley. 

Adding momentum to the developments is Sasol, which announced last October that its Boegoebaai “green hydrogen” development in the Namakwa Special Economic Zone had been designated a Strategic Integrated Project in the South African National Development Plan. A feasibility study to explore the potential of Boegoebaai as an export hub for green hydrogen and ammonia is under way and will take about 24 months.

Sasol has partnered with the Industrial Development Corporation, the government’s financial partner for all things hydrogen, which will support it in its efforts to develop pilot and commercial-scale hydrogen projects with funding. Sasol has publicly stated that it aims to start producing green hydrogen by 2023.

A report published in June last year supported the vision articulated by the then Department of Science and Technology in 2008. Commissioned by the German green energy think-tank Agora Energiewende, the report, A Super H2igh Road Scenario for South Africa, argued that South Africa has the potential to become a key exporter of green hydrogen and cut its greenhouse gas emissions by 70% if it were to capitalise on opportunities presented by the hydrogen economy. 

A month earlier, German development bank KfW initiated a €200-million programme to support the establishment of green hydrogen projects in South Africa. The green hydrogen economy is in its infancy, but the past year has seen significant advances in government policy, public and private sector research, plans and commitments. In 2022, it seems likely that the pace will quicken. 

Article courtesy of Daily Maverick

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Unlocking the hydrogen economy in Africa

Could hydrogen become a game-changer within the energy space, and what will it take to become a viable alternative, considering Africa’s unique characteristics?

The Africa Energy Indaba Conference (AEI), now in its 14th year, combines the hybrid model of virtual discussion and debate (1-3 March 2022) with an on-site in-person Exhibition (1-2 March 2022) at the CITCC in Cape Town. In line with the theme of this year’s conference, The Business of Energy-Africa Beckons, the annual AEI conference continues with its commitment to energy sustainability through discussion and robust debate to find solutions to accelerate adequate energy generation across Africa.

Without exception, the prestigious annual AEI Conference includes a diverse group of influential, energy-oriented personalities and high-profile speakers. The AEI luminaries will share their real-world insights about the changing African energy landscape and explore what is needed to meet the rapidly growing need for energy access in Africa.   A primary focus of the event is that it allows for business opportunities to be raised and deal flow to be accessed throughout the event.

AEI 2022 will inform about the African market and future business opportunities in the energy space, regional integration, and the importance of African Power Pools. The event will furthermore, provide the opportunity to learn about disruptive business models, the need for innovative financing solutions, and the impact of Industry 4.0 on the energy sector. Hear more about evolving grid technologies, renewable and cleaner energy, energy storage, and energy efficiency. 

Solar panels, wind turbines, and lithium-ion batteries are helping to steer the world toward a cleaner energy future. However, much more needs to be achieved to speed up the pace of change and avoid a climate disaster. A highly efficient green fuel, capable of powering heavy-duty transportation and industry with high energy and high heat demands, is required to enable the change. 

Green hydrogen is likely to be adopted first by industrial feedstock, transportation, and storage. Because the use of renewable energy increases the requirement for long-duration storage, it is crucial to cut emissions. As wind and solar generation can be seasonal, extra power must be captured and stored in a way that allows for use when demand rises. That chasm can be filled with green hydrogen.

Green hydrogen is a new but reliable technology for reducing carbon emissions in areas where electrification is ineffective. The growth of green energy is predicted to be among the fastest of any aspect of the energy revolution, generating specialized opportunities for businesses and investors.

Neither gas produced from coal or lignite (brown) nor gas produced through steam methane reformation (gray) is carbon-friendly, and governments and businesses are sourcing and requiring cleaner alternatives.

One option has been “blue hydrogen,” whereby gas is produced through steam methane reformation; emissions are reduced through carbon capture and storage. However, only half the carbon is created, not zero-emissions.

Green hydrogen is a hydrogen-based fuel that electrolyzes water with electricity generated from low-carbon sources. Using this renewable energy source could almost eliminate emissions. 

Day 2 of the AEI conference will see attendees have the unique opportunity to avail themselves of panel discussion six, entitled “Green Hydrogen: Better than Hot Air?”   Could hydrogen become a game-changer within the energy space, and what will it take to become a viable alternative, considering Africa’s unique characteristics?

Today, approximately 96% of hydrogen is produced through methods involving the consumption of fossil fuels.

However, could the production of green hydrogen, which is almost entirely independent of fossil energy sources, become a real possibility? If concerns about climate change drive the energy transition, green hydrogen will likely be the solution of choice across several high-emission sectors.

Setting up a hydrogen economy, like the fossil fuel industry 150 years ago, requires starting from scratch and will not happen without a strategy. The global trend is to create “hydrogen valleys” in order to catalyze development. These are geographical locations—a city, a region, an island, or an industrial cluster—where multiple hydrogen applications are merged into a single ecosystem that consumes a considerable amount of hydrogen, hence increasing scale and improving project economics.

With this in mind, the SA National Energy Development Institute, the Department of Science, Technology, and Innovation, Anglo American, Bambili Energy, and Engie collaborated on a study to find ways to transform South Africa’s bushveld complex, as well as a larger region between Johannesburg and Durban, into a hydrogen-producing region. The Namibian government announced at COP26 that HYPHEN Hydrogen Energy has been selected as the preferred bidder for a $9.4 billion green hydrogen project to be created in the coastal town of Luderitz in Southern Namibia.

South Africa seeks to speed up its own green hydrogen initiatives at Boegoebaai, a proposed new special economic zone (SEZ) over the Namibian border. However, according to President Cyril Ramaphosa, Boegoebaai could bring South Africa and Namibia closer together as the two Southern African countries compete for a slice of the green-hydrogen export market.

Do not miss this opportunity to register and hear more on this vital topic at AEI 2022 on Day 2 of the virtual conference.

green economy journal
READ MORE ON PAGE 28: HYDROGEN IN SA GETS THE GREEN LIGHT
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Gauteng, Northern Cape, Sasol sign groundbreaking agreement on green hydrogen

Chemicals and energy giant Sasol has announced a first-of-its-kind memorandum of agreement with the Northern Cape government to conduct a two-year feasibility study for a landmark green hydrogen project in the province’s Boegoebaai.

Another memorandum of agreement has also been signed with the Gauteng provincial government.

The announcement was made by Sasol’s Vice President for Energy Business Priscillah Mabelane, at the second annual Sustainable Infrastructure Development Symposium of South Africa (SIDSSA). According to Mabelane, the project in the Northern Cape could potentially produce at least 400-kilo tons of hydrogen every year.

The project underpins the province’s Green Hydrogen strategy: a precursor to the country’s Green Hydrogen strategy.

“A project of this magnitude has the potential to create up to 6000 direct jobs – generating much-needed socio-economic benefits including creating further indirect jobs across the ecosystem. We are very excited to be leading this feasibility study as part of unlocking South Africa’s ambition to a global green hydrogen export player,” she said.

With countries moving towards lowering carbon emissions, hydrogen – which only emits water vapour when used – is considered to be the fuel of the future but large scale use of hydrogen was hampered because of the need to burn fossil fuels when extracting it.

Now countries such as South Africa, which have great potential and access to renewable energy resources, are able to produce clean hydrogen without the need to burn any fuel which can potentially place them as leading players in a green hydrogen economy.

This, Mabelane said, gives South Africa immense potential to benefit from the green economy.

“South Africa’s total green hydrogen potential could reach four to seven million tons by 2050 with over three million tons of export opportunity. This catalyses the roll out of more than 50GW of renewable energy for South Africa, contributing more than R100 billion per annum to our economy and creating more than 370 000 jobs to 2050.”

Mabelane added that as part of Sasol’s approach to “developing a hydrogen economy”, the company has established several partnerships – including signing a memorandum of agreement with the Gauteng government.

“We signed a memorandum with the Gauteng provincial government to leverage special economic zones. These have been earmarked as enablers to unlock South Africa’s green hydrogen market potential for domestic use such as mobility, revitalisation of the steel industry and sustainable aviation fuel, particularly at OR Tambo [International Airport],” she said.

Head of Infrastructure and Investment in the Presidency, Dr Kgosientsho Ramokgopa, said the memoranda of agreement are an indication of South Africa’s commitment to lowering the country’s carbon emissions.

“Green hydrogen is the 21st-century oil and it’s going to contribute in the agenda of the country as led by [Environment, Forestry and Fisheries] Minister Barbara Creecy of making sure that we meet our obligations with regard to our nationally determined contribution, the net-zero [carbon emissions] path that we have articulated and it should constitute part of the totality of submission when we go to [the United Nations Climate Change conference],” he said. – SAnews.gov.za

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Registration Open for Mastering Clean Hydrogen Live Online Masterclass

Due to popular demand, Infocus International Group is bringing back the Mastering Clean Hydrogen online masterclass and it will be commencing live on 17 August 2021.

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Time to get real: amid the hydrogen hype, let’s talk about what will work

For 50 years hydrogen has been championed as a clean-burning gas that could help reduce greenhouse gas emissions. The idea of a “hydrogen economy” is now enjoying a new wave of enthusiasm — but it is not a silver bullet. Amid the current hydrogen hype, there is little discussion about when the technology can realistically become commercially viable, or the best ways it can be used to cut emissions.

Here’s where we can focus hydrogen investment to get the best bang for our buck.

An industrial skyline
A poorly targeted hydrogen strategy will slow emissions reduction. AP

Hydrogen sucks up energy and space

Hydrogen is the most abundant element in the universe, but rarely is it freely available. It must be unlocked from water (H2O) or fossil fuels such as methane (CH4), then compressed for transport and use. These steps waste a lot of energy.

To be transported, for example, hydrogen must be kept under high pressure or extremely low temperature. And in terms of energy storage, even heating up stones is more efficient.

The world must reach net-zero emissions within 30 years to avert the worst climate change. That means using renewable energy as efficiently as possible to maximise emissions reductions and minimise the land space required. So we must be strategic in how and where we use hydrogen.

Hydrogen pathways. Staffell et al 2018. The role of hydrogen and fuel cells in the global energy system.

Use hydrogen in places electricity won’t go

In most applications, renewables-based electrification has emerged as the most energy efficient, and cost-effective way to strip emissions from the economy.

Yet there are some industries where electrification will remain challenging. It’s here renewable hydrogen — produced from wind and solar energy — will be most important. These industries include steelcementaluminiumshipping and aviation.

A renewable hydrogen export market may also emerge in the long-term.

Renewable hydrogen will also be important to replace existing hydrogen produced by fossil fuels. But this alone will require a significant increase in electricity generation, to reach net zero emissions by 2050. This is a major challenge.

What about cars and trucks?

Road transport is one area where we believe hydrogen will not play a major role. In fact, Telsa founder Elon Musk has gone as far as to call hydrogen fuel-cell vehicles “mind-bogglingly stupid”.

Hydrogen vehicles will always consume two to four times more energy than battery electric vehicles. This is simply due to the laws of physics, and cannot be resolved by technological improvements.

In the case of hydrogen-powered vehicles, this will mean higher costs for consumers compared to battery-electric vehicles. It also means far more space for solar panels or wind turbines is needed to generate renewable energy.

What’s more, electric vehicles already have longer driving range and continuously expanding charging infrastructure, including ultra-fast chargers.

Comparing the amount of electricity that is lost for hydrogen cars versus electric cars. Volkswagen AG

Most global car makers have recognised the lack of advantage for hydrogen cars and instead invested about US$300 billion in the development and manufacturing of electric cars. Toyota and Hyundai — the last main proponents of hydrogen cars — are also ramping up efforts on electric cars.

As for trucks, the US Department of Energy does not expect hydrogen semi-trailers to be competitive with diesel until around 2050, mainly due to the high cost and low durability of hydrogen fuel cells.

While hydrogen trucks may have a role to play in 20 to 30 years, this will be too late to help reach a 2050 net-zero target. As such, we must explore energy-efficient options already widely deployed overseas, including electric trucks, electrified roads and electrified trailers.

A hydrogen vehicle at a refuelling station
Hydrogen vehicles are less energy-efficient than electric vehicles. Kydpl Kyodo/AP

A truly strategic plan

Hydrogen derived from fossil fuels is currently used to make products such as fertiliser and methanol. Supporting the transition to renewable hydrogen for these uses will be an important first step to scale up the industry.

If produced at regional shipping ports close to aluminium, steel or cement plants, this will provide further opportunities to expand renewable hydrogen use to minerals processing, while creating new jobs.

As hydrogen production scales up and costs fall, excess hydrogen would be available at ports for fuelling ships — either directly or through a hydrogen derivative like ammonia. Hydrogen gas could also be used to make carbon-neutral synthetic fuel for planes.

If an international export market emerged in the future, this strategy would also mean renewable hydrogen would be available at ports to directly ship overseas.

Finally, if the development of hydrogen truck technology accelerates before 2050, renewable hydrogen would be available to power the significant number of semi-trailers that travel to and from shipping ports.

Shipping containers and cranes at a port.
Daean Lewins/AAP

Let’s get real

Renewable hydrogen is a scarce and valuable resource, and should be directed towards sectors most difficult to decarbonise.

Delaying the electrification of road transport and energy on the promise of hydrogen will ultimately only benefit the fossil fuel industry.


Courtesy: The Conversation

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