Africa’s hydrogen economy is likely to start out as a demand-driven market with decarbonisation of road haulage emerging as an early use case. This could see low-cost fuel-cell electric vehicles (FCEVs) become fertile ground for hydrogen cooperation between African countries and China, according to regional industry experts.

African hydrogen development will take a gradual approach, with the short term focused on firming up domestic demand in promising areas such as baseload renewable power, green fertiliser production, off-grid independent power supply, waste-to-power and transport, according to Bamidele Adebisi, a board member at the African Hydrogen Partnership, a continent-wide industry association.

Medium-term development will aim to use locally produced green hydrogen to decarbonise energy-intensive industries on the continent such as steel, paper, glass and chemicals, which will involve attracting foreign direct investment. The long-term goal will be for African exporters to compete in the global green hydrogen market.

This commercial pathway suggests there will be an emphasis on building out a domestic supply chain to generate end-user demand, with less importance given to hydrogen imports. This implies a prioritising of self-sufficiency and creation of a local industry for the emerging fuel source.

“Markets in Africa can actually be met by some of the technologies and capabilities in China” Adebisi, African Hydrogen Partnership

Scaling up demand for hydrogen quickly in Africa will be key to establishing its commerciality on the continent. One way to achieve this is deploying FCEVs to replace the continent’s diesel truck fleet, which is where China’s low-cost, large-scale manufacturing capabilities could come into play, Adebisi said at the China-Africa Hydrogen Forum in mid-September.

“In Africa there are heavy-load, long-haul, heavy-duty vehicles that we need to decarbonise… [there are] several thousands of them in existence and increasingly using diesel mostly,” says Adebisi. “If all these were refitted to run on green hydrogen, that is obviously good for the environment. Good collaboration between Africa and China means that this can actually be produced at scale, which is good for prices.”

“With a reasonable price and a common standard, working together, it means [Africa and China] can actually help each other in opportunities… markets in Africa can actually be met by some of the technologies and capabilities in China,” says Adebisi.

Policy challenges

However, policy and regulatory frameworks in many parts of Africa continue to favour fossil fuels, holding back commercial FCEV adoption. “Within South Africa we have a current policy that allows you to buy diesel vehicles for public procurements or public buses at an incentivised rate. There is a taxation benefit,” says Fahmida Smith, principal market development director at mining giant Anglo American.

Repurposing these policies to benefit clean energy represents both a challenge and an opportunity. “One of the things we always advocate for is not necessarily needing an additional set of funding, but how do we take these existing policies and reposition them so that they become relevant to the green energy transition,” says Smith. “Once these taxation benefits become available [for FCEVs], they become more attractive within the market, and that means we can then get uptake of these vehicles and start delivering them.”

FCEVs are a focus of the hydrogen industry development plan China released in March, which set a goal of having 50,000 hydrogen-powered vehicles in operation by 2025. FCEV production and sales in China both stood at 2,000 vehicles in the first eight months of this year, up by 200pc and 160pc respectively, according to data from industry body the China Association of Automobile Manufacturers.

China’s FCEV industry aims to promote such vehicles in commercial applications through to 2025, before ramping up efforts on a large scale over 2030-35, notes Zhang Bo, director of the China Society of Automotive Engineers’ hydrogen and FCEV research centre.

The goal is to lower the cost of commercial FCEVs to RMB1mn ($142,000) or less by 2025—down from RMB1.5mn in 2020—while doubling their operational lifetime to 400,000km over the same period, says Zhang. By 2030-35, commercial FCEVs should cost no more than RMB500,000 and be capable of operating for 1mn km.

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Author: Shi Weijun