South African chemical and energy company Sasol and Itochu Corporation of Japan have signed a Memorandum of Understanding (MoU) to jointly study and develop the market and supply chain for green ammonia with a focus on its use in applications such as marine bunker fuel.
The parties will evaluate Itochu’s potential involvement and participation in Sasol’s green ammonia export-orientated project(s), including product offtake as well as financial support from Japan for studies and grants relating to green ammonia projects in South Africa. The MoU was signed in Tunisia during the Tokyo International Conference on African Development (TICAD 8), a forum to advance Japan-Africa sustainable development. MUFG Bank witnessed the signing of the MoU.
Green ammonia is produced from green hydrogen, which in turn is produced from renewable electricity (solar and wind) via an electrolysis process. It is a key enabler to achieving net-zero in the marine sector where it can be used as a zero-carbon bunkering fuel. Green ammonia is a good energy carrier, especially over long-distances, and can be easily transported. The product can also be ‘cracked’ back to hydrogen gas for further applications.
Sasol is advancing a number of green hydrogen studies and projects in South Africa, such as in Boegoebaai in the Northern Cape province, that include green ammonia production at scale for export. Given South Africa’s solar, wind and precious metals resources, the country is poised to become a global hub for green hydrogen and its derivatives, such as ammonia and sustainable fuels.
Hydrogen and ammonia play an important role in the Japanese Green Growth Strategy and are positioned as ‘new resources’ with significant potential to reduce the country’s reliance on carbon-intensive fossil fuels, such as coal and oil. Japan is expected to be a large importer of green ammonia in the future.
Sasol EVP Energy Business, Priscillah Mabelane, said: “Sasol is excited about our collaboration with Itochu to unlock South Africa’s significant potential as a large-scale producer of green hydrogen and ammonia. This marks yet another milestone in our ambition to lead the energy transition in South Africa through decarbonisation, while stimulating industrial development.”
Itochu has been strengthening initiatives for the establishment of production and supply chains for low-carbon ammonia, the development of ammonia-fuelled ships and establishment of an international value chain for ammonia as a fuel in the marine sector among other applications. Using the MoU as a platform, Itochu, together with Sasol, will jointly study supply chains and markets for green ammonia, and assess other partnership models related to green hydrogen and ammonia production and exports from South Africa.
Takanori Sazaki, MUFG Bank Senior Executive Officer, said: “MUFG is committed to empowering a brighter future and are proactive in addressing climate change and environmental protection issues. As the first Japanese Bank to declare carbon neutrality and participate in the UN-led Net Zero Banking Alliance (NZBA), this MoU aligns with our commitment of achieving Carbon Neutrality by 2050. We were very pleased to witness the signing of this MoU between Sasol and Itochu – not only because both companies are our important and long-standing clients, but also because the envisaged cooperation deals with green hydrogen and ammonia, which we believe will play a key role in establishing a low-carbon society”.