South Africa’s Hydrogen Extractive Frontier: Climate Action or Recolonisation?

The global rush toward green hydrogen presents itself as a win-win solution for climate action and economic development. European leaders paint an optimistic picture: South Africa possesses abundant renewable resources, critical minerals for electrolysers, and growing industrial capacity that could position it as a global clean hydrogen leader. South African President Ramaphosa echoes this enthusiasm, envisioning hydrogen as a way to marry Africa’s mineral wealth with renewable energy to decarbonise industries while creating jobs and stimulating investment.

While green hydrogen development is promoted as a climate necessity and force for sustainable development, the inequitable investment partnerships South Africa is making with foreign partners risk reproducing the same extractive relationships where African countries provide raw input while others reap the industrial and financial benefits.   

In global trade relations, access to resources and production capacity has rarely translated into control or equitable benefit. Africa’s vast resource potential has historically been externally controlled, with limited domestic value capture. This pattern risks repeating itself in the emerging green hydrogen economy.

South Africa holds a critical role in the emerging hydrogen economy as a source of renewable energy and green hydrogen production. Yet, its position is increasingly shaped by structural and historical dynamics, reducing it to a resource extraction zone, serving the decarbonization and energy security goals of Global North partners.

While European nations secure high-value activities such as technology development, market leadership, financing, trade agreements, and certification schemes within their own borders, South Africa is relegated to low-value roles in production and supply.

Germany’s National Hydrogen Strategy, for example, positions the country as the “lead provider of hydrogen technologies by 2030” (e.g. fuel cell technology), while sourcing hydrogen from partner countries in the Global South. Partner countries are expected to supply raw materials and low-value hydrogen commodities, while Germany retains control over advanced technologies and market access. Similarly, the Netherlands positions itself as Europe’s “hydrogen gateway,” capturing lucrative trading, storage, and transport activities while externalising environmental and social costs to supplier nations.

South Africa’s own Green Hydrogen Commercialisation Strategy, though framed as nationally driven, emphasises export markets. It outlines a vision for over 100 GW of dedicated renewable energy capacity, primarily for export, requiring extensive infrastructure such as desalination plants, specialised transport networks, and dedicated export ports.

This export-first approach risks diverting renewable energy away from urgent domestic priorities like energy access, industrialisation, and job creation, reinforcing green extractivism; the appropriation of land, water, and other resources for renewable energy projects in ways that replicate the exploitative patterns of fossil fuel extraction rather than inclusive development.

Mechanisms of contemporary extraction

Green extractivism operates through sophisticated neoliberal mechanisms that legitimise resource appropriation as a climate necessity. Foreign direct investment and public-private partnerships establish corporate-led governance frameworks that prioritise investor returns over local benefits. Rather than supporting adaptation and mitigation for vulnerable populations, climate finance consolidates corporate control over resource governance and embedding neoliberal policy frameworks within national strategies.

South Africa has restructured its institutions and policies to create an investor-friendly ecosystem, offering tax incentives, subsidies, and tailored regulatory processes to attract foreign investment. The German KfW Development Bank’s allocation of $1.3 billion to support South Africa’s hydrogen sector comes with structural reform conditions mandating increased private sector participation in energy governance. Public funds are channelled through the blended finance platform SA-H2 Fund to de-risk investment in the Coega Green Ammonia project, led by UK-based Hive Energy.

Despite its strategic importance, the project’s value chain remains largely dominated by foreign entities. Its substantial output of one million tonnes of green ammonia annually is geared toward export markets in Asia and Europe. Financial risks are socialised through public funding, while profits are expected to flow primarily to international investors.

South Africa’s profound structural vulnerabilities, shared by many African economies, undermine its position in international energy and trade relationships. Economic fragility, driven by persistent unemployment, extreme inequality, currency depreciation, and Eskom’s debt crisis, intersects with critical infrastructure deficits across multiple sectors. The country faces a strained electricity grid, limited gas pipeline infrastructure, water scarcity in regions targeted for hydrogen production, and port facilities ranked among the world’s least efficient.

These vulnerabilities create conditions where any promise of development becomes difficult to refuse, regardless of its terms. While South Africa mobilises its renewable energy resources to serve European decarbonisation goals, millions of its citizens continue to experience energy insecurity through persistent load-shedding. Even green fertilisers produced from hydrogen remain unaffordable for smallholder farmers.

Renewable energy generation for hydrogen production requires vast territorial appropriations that bring industrial development into direct conflict with existing land uses. Hydrogen production is particularly water-intensive, exacerbating water scarcity in arid regions like the Northern Cape, where major projects are planned.

The transformation of strategic ‘Hydrogen Hubs’ treats these regions as abstract spaces for industrial development rather than lived environments sustaining cultural identity and economic security. Sasol’s Boegoebaai hydrogen cluster in the Northern Cape, spanning 60,000 hectares, risks dispossessing the indigenous Nama people of their ancestral lands.

Similarly, the deep-water port and desalination facility to support hydrogen production risks disrupting marine ecosystems due to brine discharge, increased salinity, and thermal pollution from desalination plants. The fishing community also face displacement and loss of livelihoods, especially in areas like Port Nolloth.

Mpumalanga, long devastated as a sacrifice zone for coal production, has suffered from severe air pollution, land degradation, and widespread health impacts. The province is now home to three major green hydrogen projects being developed on land leased from Eskom, near existing coal infrastructure: Sasol Hyshift in Secunda, Camden Green Hydrogen and Ammonia in Ermelo, and HDF Renewstable Mpumalanga in Standerton.

This new wave of industrial transformation risks further marginalising local communities by concentrating the burdens of both the old carbon economy and the emerging green economy.

Contested vision of just transition

Despite the policy rhetoric emphasising ‘just transition’ — the shift to a low-carbon economy that ensures fairness and inclusion for workers and communities affected by the transition – current arrangements demonstrate a significant disconnect between transformative aspirations and material realities.

The Just Energy Transition Investment Plan shows a striking imbalance between infrastructural spending on large-scale export projects and social investments in community benefits and addressing energy poverty. Of the 1.5 trillion rand total investment, only 60.4 billion rand specifically targets just transition initiatives in Mpumalanga, the province most affected by coal sector transitions.

European hydrogen strategies, including the EU Hydrogen Strategy and related initiatives like the European Hydrogen Backbone and Clean Hydrogen Partnership, focus on industrial competitiveness, infrastructure development, and decarbonisation targets, completely ignoring community consultation. This systematic exclusion occurs despite South Africa’s constitutional commitments to democratic governance and communities’ rights to clean water and land.

There is an urgent call for a justice-centred ‘post-extractivist transition’, one that envisions development beyond resource extraction, prioritising ecological sustainability, community autonomy, and equitable benefit-sharing across Africa. This approach should centre local control in global climate and energy debates. While some level of resource extraction may be necessary to support the energy transition, such activities must reinforce rather than erode community rights, environmental stewardship, and inclusive development.

A justice-centred post-extractivist transition should restructure international energy and trade relationships to centre genuine community participation in project design and ownership structures, recognising communities’ right to refuse projects that don’t serve their interests, regardless of broader climate justifications. Instead of treating consultation as a mere procedural requirement, it should embed community veto power into governance structures and ensure affected populations maintain meaningful control over decisions affecting their territories.

Projects should demonstrate direct contributions to addressing energy poverty and strengthening local economies through community ownership models, local manufacturing capacity, and revenue sharing that enhances rather than displaces existing economic activities. The land-intensive nature of renewable energy infrastructure makes territorial rights central, requiring integration of renewable development with existing land uses and community priorities.

South Africa faces conflicting development visions: one treating the continent as an extraction zone serving global markets, and another positioning renewable energy as a foundation for energy sovereignty, democratic participation, and equitable development.

Current policy trajectories lean heavily toward the former, but structural contradictions point to the need for alternative visions. Alternative visions must challenge the financial, trade, and governance frameworks that privilege Global North interests over Global South priorities.

South Africa could leverage its strategic position differently. Rather than competing to offer the most attractive investment incentives, it could coordinate with other African hydrogen producers to establish minimum standards for foreign investment, similar to how oil-producing nations have used collective bargaining. Regional cooperation could help resist the race-to-the-bottom dynamics that characterise current negotiations.

While the global energy transition shows signs of reproducing historical patterns of extraction, it also holds the potential to become a foundation for more equitable international trade relations. The direction ultimately depends on whose interests shape the transition’s terms and whose voices are centred in energy governance. A justice-centred post-extractivist transition must recognise the complementarity of climate action and decolonisation, and pursue these together.

The hydrogen economy is still emerging, and its final structure remains contested. Decisions made in the coming years about ownership models, governance frameworks, and benefit-sharing mechanisms will determine whether this transition strengthens or undermines the prospects for genuine sustainable development in South Africa — and whether it becomes an effective tool for global decarbonisation.

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This article was first published by ROAPE.