Green ammonia is emerging as a key player in the global power industry, according to the developer of a $1 billion green hydrogen-to-green ammonia project in South Africa’s Eastern Cape.
Hive Hydrogen, led by former Eskom CEO Thulani Gcabashe, has progressed to the final stages of Phase 1 in its ambitious project at the Coega Industrial Development Zone. Colin Loubser, General Manager of Hive Hydrogen, emphasizes the growing demand for green ammonia in both the power and maritime industries.
“This is a really exciting time for us,” Loubser said. Hive Hydrogen has completed pre-front-end engineering design (pre-FEED) studies and has begun gathering information from global and local engineering procurement and construction companies.
The maritime industry, a significant polluter, is increasingly turning to green ammonia. Heavy fuel oils and diesels used by ships pollute both air and water. As a result, more ships are being commissioned to run on green ammonia.
“The technology readiness levels of green ammonia engines for shipping are now bankable and high quality,” said Loubser. This progress marks a critical step toward reducing ocean pollution.
Strategic investors from Japan and Europe have visited South Africa, showing strong interest in the project. Hive signed a memorandum of cooperation with Itochu in December, focusing on securing offtake agreements. “We’re very confident about European and Far East offtake,” Loubser said. Discussions are ongoing with potential buyers in Korea and Japan.
In Europe, there is also a growing demand for green ammonia in the fertilizer industry. Industry players are looking to convert ammonia back to hydrogen. “We’re focused on Japan, Korea, and the green fertilizer industry in Europe,” Loubser noted.
Hive Hydrogen aims for a funding mix of 70% debt and 30% equity, with the final investment decision expected by the end of next year. “We’re working on improving the 70/30 debt-to-equity component,” Loubser said. He praised Eskom’s cooperative approach and the recent structural changes in South Africa’s energy sector.
Construction of Hive Hydrogen’s 3.6 GW renewable energy capacity will begin in 2026, following environmental approvals. This capacity will enhance the grid and support other independent power producers. “Eskom is moving forward strongly on their grid strengthening and buildout plans,” Loubser said.
Producing low-cost green ammonia is a key goal for Hive Hydrogen. Despite challenges in securing government subsidies compared to countries like Australia and the US, South Africa has unique advantages. Its favorable wind and solar conditions, combined with an integrated grid, position the country competitively in the global market.
Hive Hydrogen is committed to the Just Energy Transition. The company has aligned itself with the program’s principles and is working to maximize local labor involvement. “We’d like to get 99% to 100% of all local components with local labor,” Loubser said. This focus aims to mitigate the impact on communities dependent on the coal industry.
The project also has the potential to spark a hydrogen valley in Nelson Mandela Bay. The automotive industry, shifting from internal combustion engines to hydrogen, is a natural fit. Interest in hydrogen fuel cell vehicles is growing, and advancements in ammonia internal combustion engines are promising.
While the hydrogen economy is still in its early stages, South Africa is well-positioned to benefit. The country’s integrated grid, favorable renewable energy conditions, and strategic location make it an attractive hub for green hydrogen and ammonia projects.
Hive Hydrogen’s green hydrogen-to-green ammonia project represents a significant step toward a sustainable future. With strong global interest, strategic partnerships, and a commitment to local labor, the project is poised to transform both the power and maritime industries. As the world moves toward cleaner energy, South Africa stands ready to lead the way.
Source: Mining Weekly
