Maritime shipping may only account for 3% of all global emissions, but 80% of world trade is moved by sea. To put this in perspective, cargo shipping creates one billion tonnes of climate pollution each year – the equivalent of what an industrialised country like Germany produces annually. And if the sector continues using fossil fuels, the contribution may rise to 10% by 2050.
Aware of this, more than 200 stakeholders in the shipping and fuels value chain formed the Getting to Zero Coalition in 2019. It included the Global Maritime Forum, Friends of the Ocean Action and the World Economic Forum.
Two years later, 22 industry leaders and politicians signed the Clydebank Declaration at the United Nations Climate Change Conference (COP26), committing to decarbonising the maritime industry by developing six green shipping corridors – zero-emission routes – between two or more ports by 2050.
Manufacturers are now applying pressure to decarbonise. Nine companies – including Amazon, Michelin, Ikea and Unilever – committed to only moving cargo on ships using zero-carbon fuel by 2040.
The proposed green corridors mean the ships transporting goods cannot use fossil fuels. Instead, they must use fuels such as green hydrogen or its derivatives – hydrogen generated by renewable energy – renewable electricity, methanol and other sustainable options. Between 60 000 to 80 000 ships are currently plying international shipping lanes, and current plans see just 200 green vessels in operation by 2030 – a drop in the ocean. Some reports indicate, however, that key technologies for large zero-emission vessels will be available by 2024.
Hydrogen is a priority for South Africa and presents a significant opportunity for economic development and new jobs. South Africa’s decarbonisation objectives require leveraging Renewable Energy Independent Power Producers Procurement (REIPPP), Renewable Energy Development Zones (REDZ) and other renewable development programmes to produce green hydrogen. This also creates an opportunity to engage in energy export at the international level. According to a report in the Economist magazine, globally, there are more than “350 big projects” in the hydrogen sector and “cumulative investment could reach $500bn by 2030”. It also cites a Morgan Stanley estimate that hydrogen sales could be worth “$600bn by 2050” annually.
Developing a local hydrogen economy will necessitate creating new industries (and new jobs) and leveraging South Africa’s solar and wind resources. This raises the question about the role the Saldanha Bay Industrial Development Zone (SBIDZ) will play. While South Africa is not a signatory to the Declaration, two of our largest export markets are – Germany and the USA – so preparations need to be made now.
Apart from the vessels, the portside activities will also need to consider hydrogen fuels for heavy- and medium-duty trucks and handling equipment. Some say that hydrogen is a better alternative (than electric battery) for trucking with the current technology because it offers a more extended range and quicker refuelling. And given that the Port at Saldanha Bay is supplied with iron ore by train (some of the longest freight trains in the world), it could make sense to consider running hydrogen-powered trains. Hydrogen can also replace coking and blast furnaces in the steel sector to produce “green” steel.
SBIDZ recently hosted a webinar on the future of Saldanha Bay as a hydrogen export hub. We need to engage with the government to encourage such hubs with multiple potential users, such as Saldanha Bay, with its port, rail network and steel factory. We have the deepest – undeveloped – port in the Southern Hemisphere, and it’s already focused on bulk carriers and has a freeport status.
The SBIDZ’s original market focus as a service hub for offshore exploration and production (E&P) vessels, such as oil rigs, is changing – as it must do to remain relevant. However, even with investments moving from new offshore oil wells into gas, offshore wind and onshore renewable energy alternatives, offshore hydrocarbons will continue to play a role during a just transition. This is because it still provides a value chain of needs and a lifecycle orientation, including decommissioning, recycling, and retrofitting vessels and equipment in that space.
Nevertheless, we can be a hub for “transition” technologies in energy and maritime and the traditional oil and gas markets, maritime engineering, logistics and services. So we need to start preparing now.