At this week’s Junior Indaba, experts emphasized that green hydrogen must be made affordable to effectively decarbonize various technologies, addressing the urgent need to reverse delays in emission reductions to achieve net zero by 2050.
Robin Griffin, Vice President of Metals and Mining Research at Wood Mackenzie, highlighted the importance of aligning several factors to reduce the demand for metals and enable green hydrogen to become cost-effective. These factors include policy, technology, the circular economy, social acceptance, and primary supply.
“We need a whole bunch of technologies to come together to reduce our demand for metals but also to allow green hydrogen to become cheap enough to decarbonise different technologies,” Griffin stated. His presentation was linked to that of Hugo Pienaar, Chief Economist of the Minerals Council South Africa, who noted significant progress in Eskom’s plant performance.
Australia is leading the charge in decarbonisation, with most of its $23 billion allocation over ten years dedicated to green hydrogen generation, including a $2/kg production credit. However, China remains more competitive in this arena. To support green hydrogen developers, Australia is set to introduce its own carbon-border adjustment mechanism, similar to Europe’s, ensuring ongoing support for local processing.
Despite the incentives provided by the Inflation Reduction Act, North America still struggles to meet its green hydrogen demand. Griffin stressed the need for maximising scrap metal recovery, noting that while there is significant growth in secondary materials, primary metal, and mineral supply will always be necessary.
Griffin pointed out the crucial need for social buy-in for the energy transition, emphasizing that people generally support the transition but often oppose mining, not realizing the two are inextricably linked. “People, on the whole, certainly want the energy transition, but they don’t want mining and they haven’t quite worked out that the energy transition and mining are inextricably linked,” Griffin said.
He highlighted the metals-intensive nature of the energy transition, illustrating that the demand for copper in offshore wind is 15 times more intense per gigawatt than in coal-fired power stations. The shift from fossil fuels to metals generates enormous potential demand, particularly for battery raw materials, which are seeing massive growth rates.
Griffin underscored the significant investment needed to close supply gaps, noting that many mining companies return substantial capital to shareholders as dividends instead of reinvesting in new projects. He called for an acceleration of final investment decisions for major projects to meet the increasing demand for metals.
The path to net zero dramatically increases the demand for various metals. “The net-zero case doubles the demand for copper and trebles it for aluminium, with even cobalt becoming a major issue,” Griffin explained. He emphasized the urgency, saying, “You need everything, everywhere, all at once to get us on the net-zero path.”
Hugo Pienaar focused on South African commodities, including gold, iron ore, coal, and platinum group metals, analyzing trends in rand terms. Regarding South Africa’s electricity situation, Pienaar highlighted that improved operational performance at Eskom would benefit the domestic coal sector, given Eskom’s significant use of South African coal.
Pienaar pointed out that South Africa had experienced over 50 days without load shedding, attributing this improvement to better plant performance and not increased diesel usage. “In fact, they are burning much less diesel than this time last year. This improvement is not a diesel story; it is really a story of plant performance starting to improve, given increased maintenance over the last 12 months or so, and long may it last,” Pienaar said. He expressed confidence that these improvements were genuine and not an election gimmick, stating, “We think there is real progress being made.”
The discussions at Junior Indaba underscored the critical role of green hydrogen in the global effort to achieve net-zero emissions. Making green hydrogen affordable and ensuring the alignment of various factors—policy, technology, social acceptance, and supply chains—are essential steps toward a sustainable future.
The transition to green hydrogen and other clean technologies requires a concerted effort from governments, industries, and communities worldwide. As illustrated by Australia’s significant investments and China’s competitive edge, international cooperation and innovation will be key to overcoming the challenges and seizing the opportunities presented by the energy transition.
The Junior Indaba highlighted the urgent need for affordable green hydrogen to achieve optimal decarbonisation. Experts emphasized the importance of aligning policy, technology, social acceptance, and supply chains to make green hydrogen cost-effective. The discussions also pointed out the significant demand for critical metals in the energy transition and the necessity for substantial investment in new projects.
As South Africa and other countries navigate their paths toward net-zero emissions, the lessons and strategies shared at the Junior Indaba provide valuable insights into the steps needed to ensure a sustainable and resilient energy future.
Source: Mining Weekly
