…first shipment expected as early as 2026
Namibia and Germany have both identified potential export volumes of 3.5 million tons of Namibian green ammonia to the European country by 2030 as they defined further steps of cooperation at joint discussions held last week.
The discussions that took place in Germany were aimed at bringing producers in Namibia together with German off-takers.
Business Express can affirm that the parties at the discussion also acknowledged that the first shipments from Namibia to Germany are expected to take place as early as 2026.
The discussions, jointly initiated by the German Federal Ministry of Economics and Technology (BMWK) and the ministry of mines and energy also featured Presidential economic advisor, James Mnyupe and were led by German State Secretary, Patrick Graichen.
“This is an important milestone to advance the trade of hydrogen between the partner countries and to create investment security, A real win-win situation!,” said Rainer Baake, special envoy of BMWK.
Mnyupe also echoed these sentiments highlighting that part of the discussions was to discuss the supply potential that Namibia has.
“Earlier this week, I was privileged enough to be hosted by Patrick Graichen and the Federal Ministry for Economics and Climate Action in a round table discussion with the German business community in Berlin. The main objective of the gathering was to begin to increase visibility between prospective commercial German off-take for clean Namibian molecules and the supply potential that sits within Namibia’s !Karas region.
“This was a seminal moment, where Presidential vision met C-suite executive strategic imperatives and the deployment of risk capital was at the heart of the discussion. Both sides identified a potential export volume of 3.5 million tonnes of Namibian green ammonia by 2030 as a tangible objective and defined the further steps of cooperation to unlock and support this ambition,” Mnyupe said last week.
Germany is the largest consumer of ammonia in Europe. Ammonia is a key feedstock in industry and is becoming increasingly important on the road to climate neutrality. Currently, ammonia in Germany is produced exclusively using natural gas; in recent years, production has accounted for 11 percent of industrial natural gas use and nearly 6 million metric tons of CO2 emissions annually, according to BMWK.
Earlier in the year, Germany federal minister, Robert Habeck said that Namibia presents positive conditions to be able to deliver on its green hydrogen agenda.
“For a decisive energy transition and climate protection we need strong bilateral energy cooperation. Green hydrogen is a key element for a climate-friendly and secure energy supply for Germany. Namibia is ideally positioned as an exporter of green hydrogen and its derivatives and has great renewable energy potential. There is hardly a better place in the whole world to produce green hydrogen with the help of wind and solar energy,” said Habeck when the cooperation agreement with mines and energy minister, Tom Alweendo was launched in March 2022.
Government is focusing efforts on achieving large-scale, low-cost renewable energy development and designing models for sustainably maximizing fiscal revenue and local development in renewable energy investments and green ammonia production. Namibia’s world-class solar and wind resources give it a long-term competitive advantage in producing green hydrogen and green ammonia.
Since hydrogen can only be transported cost-effectively by pipeline and not by ship, Namibia plans to process hydrogen into ammonia with the addition of atmospheric nitrogen. A new port facility is planned for shipping the green ammonia.
A tender for the development of a first stage of the project has been won by Hyphen, a joint venture between the German company Enertrag and the South African company Nicolas Holding. The investment volume for the first expansion stage is roughly equivalent to Namibia’s current gross national product.
During the construction phase, 15,000 new jobs would be created, and 3,000 workers would be needed during operation. Namibia is working on the training and further education of local workers, who will be hired as a priority
European Union moots hydrogen deal
It has been reported that the European Union (EU) is preparing an agreement with Namibia to support the country’s nascent green hydrogen industry while increasing its imports of the fuel to reduce Europe’s dependence on Russian energy.
The potential deal will see Namibia harness its solar and wind energy to produce green hydrogen, an alternative energy source hailed as a less emissions-heavy substitute for fossil fuels, which will serve to supplement the EU’s consumption of grey and blue hydrogen, which is produced using gas.
Hydrogen is used primarily in the EU’s heavy industry and transportation sectors, with the bloc having stated in May 2022 that it plans to import a minimum of ten million tons of green hydrogen by 2030 while producing an additional ten million tons within the continent itself.
Namibia and the EU have indicated their intent on signing a Memorandum of Understanding (MoU) at this year’s United Nations Climate Change Conference, being held in Egypt in November, with Director General of Namibia’s National Planning Commission, Obeth Kandjoze, indicating that work was underway on a green hydrogen deal. The deal is expected to include a provision that grants the EU access to minerals in Namibia, with the bloc having planned a number of geological projects to explore the country’s resources.
In an effort to reduce its reliance on Russian oil, gas and coal, the EU signed an MoU earlier this year with Israel and Egypt on gas imports, demonstrating the bloc’s long-term commitment to opening the door to partnerships in Africa as an alternative source of energy.
Namibia has the potential to become Africa’s first green hydrogen export hub.
The government of Germany has agreed to invest US$41.7 million in Namibia’s green hydrogen industry, with German renewable energy company Enertag having formed a joint venture, Hyphen, with project development company, Nicholas Holdings, to produce 300,000 tons of green hydrogen per year by 2030 using 5-6 GW of renewable generation capacity and 3 GW of electrolyzer capacity.