South African petrochemical company Sasol [SOL:SJ] and Japanese trading house Itochu [8001:JP] announced a partnership to develop green hydrogen and green ammonia projects for shipping fuel and power generation, as reported by Reuters on September 2. The two companies signed a memorandum of understanding (MOU) during the Tokyo International Conference on African Development (TICAD 8) held on August 27 and 28, where Japan pledged a total of USD30bn in aid for and investment in Africa over the next three years and vowed to help African countries develop their economy in an environmentally sustainable manner. The MOU covers research on the ammonia supply chain, including a green ammonia production facility that Sasol plans to develop in Boegoebaai, Northern Cape province, South Africa.
Sasol bets on the abundant solar, wind, and precious metals resources in South Africa to make the region a global hub for green hydrogen and ammonia export. Ammonia is an excellent energy carrier that can be transported over long distances at a relatively low cost. It can effectively reduce greenhouse gas emissions when used as fertilizer or alternative fuel for shipping and thermal power generation. Green ammonia is also considered crucial to Japan’s commitment to net-zero carbon emissions by 2050. According to a roadmap published by Japan’s Ministry of Economy, Trade, and Industry (METI), the country will triple its ammonia fuel use to 3m tons per year by 2030 before raising the demand to 30m tons by 2050.