Germany’s special envoy on energy and climate change to Namibia, Rainer Bacher, says the Federal Republic of Germany is expected to pass two new laws on decarbonisation, which could create an offtake market for Namibia’s green hydrogen and ammonia.
He said this on Friday at Lüderitz during president Hage Geingob’s stakeholder meeting to update the regional leadership and community members on the development of a green hydrogen industry in the country.
Bacher said the first law establishes a quota on green hydrogen and derivatives like ammonia for Europe, stipulating that by 2030 at least 40% of hydrogen or ammonia used by companies in Europe must be derived from renewable sources.
This quota is expected to increase to 60% by 2035.
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The second law, Bacher said, is the cap European lawmakers have placed on carbon emissions to bring them down to 0% by 2039.
“This is the compromise that has been reached between the European Council and the European parliament. The egislation will be passed in the next two weeks, and Germany, having the most representatives, we are working that this legislation comes into effect,” he said.
“Sixteen years from today all our generators and all our industrial companies must no longer emit carbon dioxide from the burning of oil, coal and gas.
“And it’s obvious that this development is a great opportunity for countries like Namibia, which are developing green hydrogen industries,” he said.
Namibia has the potential to offer low-cost green hydrogen production second only to Chile, owing to its abundance of solar and wind resources.
Namibia’s green hydrogen production plant for export markets are expected to be located in the Tsau-//Khaeb National Park.
The plant will consist of five to seven gigawatts (GW) of wind and solar renewable energy facilities, and will also support infrastructure and expand port facilities at Lüderitz and Walvis Bay.
The proposed US$,4-billion project is expected to produce about 300 000tonnes of green hydrogen annually.
Hyphen Hydrogen Energy intends to begin generating green hydrogen in 2026, following an initial US$4,4-billion 2GW phase.
The extension will raise renewable energy capacity to 5GW, and electrolyser capacity to 3GW by the late 2020s.
“Governments don’t buy green hydrogen, companies do. And they look around the globe to see where they can get the cheapest product, and Namibia here has a real advantage,” Bacher said.
The cost of financing the project and Lüderitz’s development, however, are two challenges that would determine the project’s success.
“The investment is about equivalent to the gross domestic product (GDP) of the country, at US$9,4 billion. No company has this money.
“It has to come from banks, and banks have interest rates. Therefore, Namibia has the responsibility to create a stable environment for investment that would bring the cost of investment down.
“But we in Germany can also assist here by transferring our credibility on the nternational money market to countries like Namibia.
“Namibia is a democracy, you respect the rule of law, and you have a free press and an independent judicial system. Therefore we should establish relationships with countries that share our values.”
Economic activity for the export of green hydrogen will be concentrated at Lüderitz.
“Your town may double or quadruple. It’s a huge task to make sure when this project happens and international media arrives there is decent garbage disposal, sufficient water supply, sewerage works and more,” Bacher said.