JSE-listed group Sasol expects to conclude power purchase agreements for 600MW of renewable energy “imminently” as it moves forward with plans to meet a 2030 target to reduce its greenhouse gas emissions greenhouse (GHG) by 30%, while maintaining energy and chemistry. production volumes.
Renewable electricity will be transferred to the group’s South African operations through the Eskom grid by 2025 and Sasol expects to add a further 600MW of renewable energy by 2030.
The emissions reduction commitment, which was announced in 2021, has been made against a 2017 baseline of 63.9 million carbon dioxide (CO) equivalent.2e) tons and implies a reduction to 44.7 million CO22and tons in 2030.
The group has also committed to being a net zero emissions company by 2050.
Speaking to investors during a climate roundtable, CEO Fleetwood Grobler described renewable energy procurement as a key early lever in its decarbonisation strategy to 2030, during which the group would also seek to displace coal by gas, reduce coal use by closing six coal-fired boilers in Secunda and implement energy efficiency projects.
The group was also investigating various opportunities for green hydrogen and green hydrogen derivatives, particularly to displace the 2.4 million tonnes of emissions-intensive “gray hydrogen” it currently produces, mainly from coal, and that the company uses to produce fuels and chemicals using its Fischer Tropsch (FT) technology.
Grobler stressed, however, that meeting the 2030 GHG reduction target did not depend on green hydrogen, which was seen as a “sweetener” during the period and was expected to contribute to its subsequent decarbonisation only after 2030.
However, “catalytic” green hydrogen projects would be implemented in the current decade, including one to reuse a 60MW electrolytic in Sasolburg in the Free State to produce 3.5t of the clean energy carrier daily . The resulting green hydrogen would likely be used to support green mobility projects in South Africa, including fueling green hydrogen mining transport trucks.
The group would also collaboratively pursue sustainable aviation fuel (SAF) opportunities before 2030, using green hydrogen in its FT process to produce jet fuel that would likely attract a market premium from airlines. aviation
A study is currently being carried out through the so-called HyShiFT program to produce SAF in collaboration with Linde, Enertrag and Hydregen, initially under the German platform H2Global, to which the project would be tendered.
Sasol was also leading a feasibility study to explore the potential for the development of a green hydrogen derivative export hub at Boegoebaai in the Northern Cape, and had signed a green steel partnership with ArcelorMittal South Africa, to in Saldanha Bay and Vanderbijlpark.
Grobler said reducing electrogen costs to produce green hydrogen between $1/kg and $2/kg would be a key trigger for Sasol’s future green hydrogen strategy and indicated that these prices are likely arise only after 2030.
However, he noted that the incentives available in the US under the recently introduced Inflation Reduction Act would strengthen the competitiveness of green hydrogen in that country, and therefore Sasol was considering prospects for combining its FT technology with power-to-X solutions to produce green fuels and chemicals in this country.
The immediate focus in South Africa, however, would be to replace coal-fired electricity with renewables and move to secure the gas needed to displace coal in its production processes at Secunda.
Recent drilling success in Mozambique saw Sasol extend its gas supply plateau to 2028.
Executive Vice President of Energy Priscilla Mabelane said the extension had given the group more time to strengthen its gas supply options and also eased pressure to conclude a liquefied natural gas (LNG) supply deal, which it described as a “Plan B” if it did not secure more gas from the south. Mozambique through a drilling program.
Sasol expects to invest between R15-25 billion to switch from coal to gas by adding more gas reforming capacity. It hopes to invest an additional 10 billion rand to unlock more gas supplies from Mozambique.
Grobler argued that its gas strategy was unlikely to result in stranded assets as it relied on using Rompco’s existing pipeline and, should LNG be required, a flexible floating storage regasification unit. Sasol no longer thought of a gas pipeline to the north of Mozambique to take advantage of the gas available in the Rovuma basin.
Closing the six coal-fired boilers would also help Sasol meet its minimum emission obligations.
Also, Executive Vice President of Energy Operations and Technology Simon Baloyi reported that the closure would play a role in helping to reduce Sasol’s annual coal consumption, which is expected to decrease by ten million tonnes per year by 2030 relative to the 2017 baseline.
