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Guided by a five-year strategy, the government of Namibia is committed to using green hydrogen to significantly decarbonise its economy.
Namibia is strategically positioning itself to become a global leader in the green hydrogen and power-to-X (PtX) markets over the next decade.
The nation aims to leverage green power and green hydrogen as pivotal elements for attracting foreign investment, enhancing energy security, and supporting a just energy transition.
A recently released report – Localising Green Industries in Namibia – focuses on selected sectors poised to underpin Namibia’s green industrialisation and the essential cross-cutting enablers needed to advance these sectors.
The report follows a gathering on 10-11 April in Windhoek, between the Ministry of Industrialisation and Trade and the Ministry of Mines and Energy, supported by the Namibia GH2 Programme and delivered by GIZ partnering with Systemiq, who conducted the research between December 2023 and May 2024.
The event gathered stakeholders from government, industry, finance and the public to discuss the operationalisation of Namibia’s green industrialisation ambitions.
The workshop focused on identifying and evaluating the most promising sectors for green industrialisation in Namibia and how these may be operationalised in the short- and mid-term.
The report said that guided by a five-year strategy, the Namibian government is committed to using green hydrogen to significantly decarbonise its economy.
“Aligned with its vision for 2030, Namibia is dedicated to industrialisation that ensures widespread livelihood opportunities.”
Mining and energy capacity to give Namibia an edge
The report notes that the global surge towards achieving net-zero emissions, fuelled by plummeting costs of zero carbon technologies and a universal push across sectors to meet emission reduction goals, offers Namibia a prime opportunity, given its vast wind, solar and mineral reserves.
It said Namibia’s fusion of energy and mining capabilities “emerges as a linchpin for propelling a unified Green Industrialisation agenda, leveraging the country’s inherent advantages of abundant energy resources and diverse mineral wealth.”
“The mining sector, historically pivotal to the economy, is able to attract substantial investments, bolstered by strategic assets like well established infrastructure and stable governance, which have not only fuelled past success but promise to drive this transition forward.”
Green materials to the world
Namibia’s blueprint for Green Industrialisation pinpoints industries such as Green Hot Briquetted Iron (HBI) Production and Critical Raw Materials (CRM) Processing (lithium and rare earth elements) as prime candidates to ignite green industrialisation, capitalising on the country’s distinctive geological blessings to serve the global energy transition relying on these green materials.
“Essential investments in shared infrastructure and regulatory coherence to empower these sectors will also foster a synergistic environment for sustainable industrial growth across Namibia’s other industries, including additional minerals.”
The report says policymakers must prioritise establishing an enabling legislative framework to unlock Namibia’s green industry potential, drawing inspiration from successful models elsewhere (Morocco), to translate aspirations into tangible projects amid resource constraints and competitive pressures.
Namibia also has to confront dual critical challenges:
First, it must attract a greater number of industrial projects to compete.
Second, it needs to ensure these projects advance to the Final Investment Decision (FID) stage, which has been historically difficult.
“It must overcome what has been called Africa’s infrastructure paradox: despite available funds, large pipeline and clear need, few projects reach financial close.
“To move to completion, Namibia will need to de-risk these projects and create the sufficiently attractive environment with infrastructure.”
Targeting green steel
The report says a focus sector for Namibia is green iron.
“Global steel production is in the throes of decarbonisation, spurred by the industry’s public commitments to reduce their significant greenhouse gas emissions, and green hydrogen-based steelmaking via the Direct Reduced Iron (DRI) route is emerging as a key technology route.”
Namibia’s potential to competitively produce low-cost green iron hinges on several key factors.
“The shift towards DRI-based steelmaking favours regions endowed with gigawatts-worth of low-cost green power and thus green hydrogen, coupled with access to high-quality iron ore resources.
“This positions Namibia favourably as a potentially hub, given its renewable energy potential from solar, wind and imported hydro, and access to both in-country and regional sources of DRI-grade iron ore, notably from South Africa.”
The CBAM conundrum
The report says Namibia could benefit from the European Union’s Carbon Border Adjustment Mechanism (CBAM) which introduces carbon pricing to level the playing field in carbon-intensive sectors, “creating an opportunity for greener products like Namibia’s green iron to compete internationally.”
However, the economic viability of green hydrogen-based iron production under the CBAM depends on factors like hydrogen prices and consensus on green steel standards, necessitating robust implementation without opposition from entrenched industries, it cautions.
Creating a suitable investment environment
To establish a successful green iron value chain in Namibia, stakeholders must prioritise securing reliable green power, clinching off-take agreements with downstream consumers, and harmonising with evolving low-CO2 steel standards.
“This multi-faceted approach is essential for positioning Namibia as a hub for cost-effective green iron production and securing its first large-scale project.”
The report says Namibia can capitalise on the surging global interest in green infrastructure by showcasing low country risk and enacting regulatory reforms conducive to private investment and supportive of green industrialisation. |
