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Green hydrogen could be an option for the production of green steel
“There are many hurdles which industry will be confronted with in their efforts to decarbonise, particularly in developing countries such as South Africa.”
Narend Singh, Deputy Minister of Forestry, Fisheries, and the Environment, expressed these views at an Industry Conference on Bridging Compliance: Carbon Border Adjustment Mechanism (CBAM), environmental, social, and governance (ESG), and the South African metals and engineering sector.
The Steel and Engineering Industries Federation of Southern Africa (SEIFSA), in collaboration with the Danish Industry (DI), hosted the event.
Singh remarked that it is critical for South Africa to take the necessary key measures to transition without compromising the competitiveness of such industries and leaving no one behind.
He went on to say that they are concerned that, outside of multilateral processes such as the United Nations Framework Convention on Climate Change (UNFCCC), discussion and agreement on the CBAM policy design of using market principles to reduce GHG [greenhouse gas] emissions will have a direct impact on developing countries such as South Africa, exacerbating inequality, poverty and unemployment.
Touching on carbon cost liability, Singh added that South African exports of carbon-intensive goods would face an extra carbon cost liability in some jurisdictions.
The need for climate action to be centred on a just transition in a developing South Africa
He stated that his department has been actively involved in the decarbonisation of the steel industry.
“The department, in collaboration with the Department of Trade, Industry, and Competition and in partnership with the Organisation for Economic Cooperation and Development (OECD), has been working closely with industry associations, the South African Iron and Steel Institute (SAISI), and industry partner, ArcelorMittal, together with other players, to determine what may be the low-hanging fruit for a low-carbon transition.
“The entire value chain has to be reflected upon—both upstream and downstream players. This is work in progress and indeed comes with its own set of challenges, in the form of necessary research and development, capacity development, and the much-needed capital investment,” Singh said.
He indicated that green hydrogen is an option for the production of green steel.
“Sectoring scrap metal markets as input materials for the steel sector to lower the carbon footprint, would be another option. Refurbishment of existing technology and investment into new and energy-efficient technologies are other options.
“Downstream industries are also faced with competition on imports. Therefore, compliance and enforcement are important, and so is the provision of the necessary legislative measures,” the Deputy Minister said.
He stated that the country recognises the need for climate action to be centred on a just transition.
“The Climate Change Act enables the alignment of policies that influence South Africa’s climate change response to ensure that South Africa’s transition to a low-carbon and climate-resilient economy and society is not constrained by policy contradictions.
“The Climate Change Act also sets out measures to enhance South Africa’s ability and capacity over time to reduce greenhouse gas emissions and build climate resilience, while reducing the risk of job losses and promoting new job opportunities in the emerging green economy,” he said. |
