The German government has approved a €15-million (about R277-million) grant in favour of chemicals group Linde in support of a renewable hydrogen project in Mpumalanga known as HySHiFT, which is being pursued jointly with Sasol, Enertrag and Hydregen Energy.

The grant was confirmed during the recent visit to South Africa of German Economic Affairs and Climate Action Minister Robert Habeck, who is also Germany’s Vice Chancellor. The funding has been approved through Habeck’s own Ministry, known by its German acronym of BMWK.

The HySHiFT partners aim to build a 200 MW electrolyser and 450 MW of renewable electricity to split water into hydrogen and oxygen and to use the green hydrogen in Sasol’s existing Fischer Tropsch facilities to produce a sustainable aviation fuel (SAF), known as E-Kerosene.

Sasol already produces a certified jet fuel at Secunda, in Mpumalanga, but using grey hydrogen.

The BMWK funding will support the first phase of the project, during which a 40 MW electrolyser is envisaged.

The HySHiFT project is among a list of nine green-hydrogen projects to have been registered with Infrastructure South Africa and is included in an updated list of Strategic Integrated Projects (SIPs) in a Government Gazette notice published by the Department of Public Works and Infrastructure on December 6 in line with the Infrastructure Development Act.

Programmes formally categorised as SIPs should theoretically be supported by a streamlined system for securing various authorisations, including environmental approvals, which are also allowed to be applied for concurrently rather than consecutively in a bid to accelerate development.

The BMWK grant approval for HySHiFT also coincided with a separate but related development: the initiation of the inaugural H2Global tender for the importation into Germany and the European Union of green hydrogen derivatives.

BMWK has approved €900-million for H2Global, which will oversee the deployment of a funding instrument that extends long-term purchase agreements to projects outside of Germany offering the most competitively priced green-hydrogen derivatives, such as ammonia, methanol and SAF. The products are then sold, under short-term contracts, to European consumers, with public funding used to compensate for any difference in pricing.

The idea of the instrument is to support the global market ramp-up for green hydrogen, whereby the long-term purchase agreements provide hydrogen exporters with the security they need to invest, while customers are able to access green-hydrogen derivatives sooner and at competitive prices.

The ten-year purchase and sale contracts are processed through Hintco, a subsidiary of the H2Global Foundation.

The first deliveries to Germany and Europe under H2Global are planned for the end of 2024 and the German government is planning to make a further €3.5-billion available for new bidding rounds with terms up to 2036.

HySHiFT consortium partners have, on several occasions, signalled their intention to bid into the H2Global scheme.