Strategic role of PGMs in creation of a viable hydrogen economy in SA

Implementing strategies in hydrogen society road map will ensure the country becomes a global participant

SA’s transition to a low-carbon economy is well under way. And we possess the world’s largest reserves of platinum group metals (PGMs), which are essential to this transition. We can expect demand for PGMs to increase given how critical they are for the hydrogen economy, one of the gateways to global net-zero targets. But is SA gearing itself to leverage off this endowment? Green hydrogen is one of the three priority sectors identified by SA in the Just Energy Transition Investment Plan (JET-IP) that was unveiled by President Cyril Ramaphosa as part of SA’s preparation for the 2022 UN Climate Change Conference (COP27). The plan was approved by the cabinet and is being presented to our partners at COP27. This is an opportune time to investigate how best to leverage our mineral endowment for economic development underpinning the transition to a low-carbon economy.

SA is the top platinum producer globally, and its PGM reserves include platinum, palladium, rhodium, ruthenium, iridium and osmium. These are used in the production of industrial chemicals such as ammonia, fine chemicals, electronics, medical devices and jewellery. But the major application is in the automotive sector as catalysts.

The transition towards electric vehicles in the near future will alter PGM demand. However, as hydrogen technologies such as electrolysers and fuel cells for stationary and transport applications become widely used for clean energy, the demand for PGMs is expected to further increase.

PGMs are used as catalysts in electrolysers and fuel cells. The former are used to split water into hydrogen and oxygen, while fuel cells are used to produce clean energy by the chemical reaction of reductant (hydrogen or other hydrocarbons) and oxygen. Electrolysers are needed to produce green hydrogen, which can ultimately decarbonise sectors such as chemicals, agriculture (green ammonia), aviation (power fuels) and steel (green steel).

Fuel cells are needed to provide “clean” electricity that can be used to power buildings and vehicles. Therefore, both electrolysers and fuel cells will play a major role in decarbonisation strategies to reach net-zero emissions.

The ultimate challenge for achieving a hydrogen economy is producing cost-competitive green hydrogen in large quantities. Hydrogen is now produced cheaply from fossil fuels. Hydrogen technologies will not be fully implemented until green hydrogen can be produced at equally competitive prices.

There are encouraging signs in this regard: renewable energy is needed to produce green hydrogen, and the cost of renewables is already beginning to fall. However, it will be important to accelerate procurement of renewable energy sources such as wind and solar, and to develop infrastructure for these technologies to lower their cost. In addition, the infrastructure for hydrogen storage and distribution must be developed if green hydrogen is to be competitively priced.

SA has produced a hydrogen society road map to support the establishment of the hydrogen economy. It is based on the government’s strategies and policy direction for bringing together stakeholders and institutions around a common vision for how to use hydrogen and hydrogen-related technologies to promote economic development and greening objectives.

As SA moves to implement the strategies contained in the road map it has the potential to become an important player, participant and scientific thought leader in the emerging global hydrogen system.

SA will need to accelerate the pace of development of its hydrogen economy if it is to derive benefits when it comes to exports of green hydrogen products. This is because the country will be competing for the same markets with other countries in the Southern African Development Community that have similar renewable energy resources.

A consistent supply of critical metals is needed to produce green energy, sustainable transport and storage technologies to achieve the goal of a net climate-neutral energy system by 2050. Energy transition measures focus on support and affordability, while overlooking the availability of materials, an equally critical factor. A coherent and long-term approach, where the availability and use of materials also become a consideration, is fundamental for success.

Policies on both the renewable energy transition and the circular economy do not adequately factor in the availability of materials. SA has a long history of minerals being mined in the country and exported to other regions where value addition occurs. To realise the ambitions outlined in the JET-IP regarding green hydrogen we need to break away from this cycle and build mineral beneficiation value chains that meet the requirements of the hydrogen economy.

This highlights the centrality of SA and Africa in the transition to a low-carbon future globally. African mineral endowments are central to such a future, and this fact should be used as a lever at COP negotiations. SA should ensure that it retains its competitiveness in the PGM sector globally, for its economic sustenance and for its low-carbon transition strategies. This can be done through the creation of a thriving hydrogen economy.

Mechanisms to achieve this already exist in the country, but they need to be reinforced. First, PGM beneficiation through catalyst development for fuel-cell and electrolyser applications will ensure mineral value addition occurs in SA. This beneficiation strategy will create markets and new applications for PGMs and facilitate the scaling up and deployment of fuel cell technologies to support critical infrastructure.

Second, support from industry and the private sector is critical: it will enable SA’s research & development efforts to be channelled towards product commercialisation, which is often a challenge in the country’s system of innovation.

Third, the government must create an enabling environment for a thriving hydrogen economy. This includes putting in place the necessary policies. SA has made progress with the approval of the presidential climate commission’s framework for a just transition in SA, and with the hydrogen society road map. Both documents set out steps for implementation.

In addition, SA’s mineral beneficiation strategy provides a framework seeking to use the mineral endowments to support the overall competitiveness of the economy and promotes the green or low-carbon economy. Also, the strategies contained in the SA PGM industry road map and SA’s hydrogen commercialisation strategy are being drafted to support the hydrogen economy.

The creation of an enabling environment must include funding support for R&D, and skills development programmes to ensure there will be a capable workforce for the hydrogen economy. It must also include science diplomacy initiatives that ensure engagement with international partners and facilitate the deployment of hydrogen technology demonstration prototypes (fuel cells and electrolysers for energy needs).

These need to be rolled out across the country to support service delivery and to encourage public awareness of and engagement with the new technologies.

Connecting all these requirements should be a strong partnership between the government, research institutions, the private sector and civil society. These partnerships are critical in ensuring that projects succeed, a common vision is maintained, and SA’s hydrogen economy is guided by the just transition framework.