The European Union (EU) has committed €32 million (R628 million) in grants to support South Africa’s emerging green hydrogen industry and promote net-zero investments across Transnet’s operations.

This funding aims to accelerate the development of a sustainable green hydrogen ecosystem in the country.

The grants were announced by European Commissioner for Energy Kadri Simson during a briefing in Pretoria, where she met with South Africa’s Electricity and Energy Minister, Dr. Kgosientsho Ramokgopa, and Trade, Industry and Competition Minister, Parks Tau.

The funding will be disbursed through EU development finance institutions in partnership with South Africa’s Industrial Development Corporation (IDC), under the framework of a 2013 infrastructure program agreement.

Of the total amount, €25 million (R490 million) is earmarked to leverage an additional R10 billion in private and public funding across the green hydrogen value chain, including production, transportation, storage, and downstream industries.

An additional €7 million (R138 million) grant will be directed to Transnet, facilitated by the Agence Française de Développement (AFD), to conduct feasibility studies and pilot projects focused on low-carbon hydrogen production and storage.

The announcement comes ahead of the EU’s launch of a matchmaking platform in 2025, which aims to connect European green hydrogen buyers with non-European producers, including potential suppliers from South Africa and Namibia.

The move aligns with the EU’s policy of progressively replacing the 10 million tons of grey hydrogen it currently consumes annually with green hydrogen, creating significant demand for sustainable energy.

South Africa’s Trade, Industry and Competition Minister, Parks Tau, welcomed the funding, expressing the country’s ambition to become a leading producer of green hydrogen and its derivatives.

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He highlighted South Africa’s potential for green industrialization, including the manufacturing of renewable energy and electrolyzer components.

The grants complement the EU’s existing Just Energy Transition Partnership with South Africa and are part of the EU’s Global Gateway strategy, which aims to boost smart, clean, and secure connections in the energy and transport sectors.

The partnership focuses on building more renewable energy infrastructure, improving energy efficiency, and promoting sustainable practices.

Commissioner Simson expressed her support, stating: “The announcement today marks a significant milestone in the European Union’s partnership with South Africa, and shows the EU’s Global Gateway strategy in action, boosting smart, clean and secure connections in the energy and transport sectors. Our cooperation in support of South Africa’s green hydrogen agenda aims to accelerate the green transition, drive sustainable development, create new economic opportunities, and build a more sustainable future for the region.”

EU grants are expected to contribute to reducing global greenhouse gas emissions, notably in sectors where they are particularly challenging, and promoting local development and economic growth by creating jobs, providing water treatment, and increasing access to green energy.

The funding will also support efforts toward the creation of a regional green hydrogen hub in the southern African region.

Transnet, an integrated transportation and logistics company, is expected to play a critical role across the hydrogen value chain for its operations as well as domestic and export markets.

The grant will help ensure that Transnet meets its own net-zero emissions with its 2040 goal.

The funding will accelerate the development of a sustainable green hydrogen ecosystem, create economic opportunities, and contribute to the global fight against climate change.