The Department of Trade, Industry and Competition (the dtic) Acting Chief Director of Special Economic Zones (SEZs), Shaun Moses, says that, to position South Africa as a producer of green hydrogen, SEZs should be modelled on a Hydrogen Industrial Hub model, combining SEZ benefits with production incentives, infrastructure guarantees, accelerated permitting and localisation support.
Speaking during the Africa Green Hydrogen Summit panel discussion on the SEZs Policy in Cape Town, Moses said the next-generation opportunity is to move from a generic SEZ model to a Hydrogen Industrial Hub model.
“That would position South Africa not only as a producer of green hydrogen, but as a globally competitive manufacturing and beneficiation platform for the entire hydrogen value chain,” he said.
Moses said SEZs can play an expanded role by creating an integrated, investment-ready environment for hydrogen production, beneficiation, manufacturing, logistics and associated value chains.
The SEZ programme provides an important industrial policy framework to support manufacturing, investment attraction and industrial growth.
“Beyond fiscal incentives, the competitiveness of green hydrogen projects will depend on a combination of enabling factors, including access to purpose-built infrastructure, renewable energy and transmission, ports and logistics, industrial clustering, streamlined regulatory processes and effective coordination across national, provincial and municipal institutions," Moses said.
He said SEZs can serve as strategic drivers for integrating these conditions and reducing project development risks.
“Key elements of an enabling SEZs environment include targeted fiscal and investment incentives to reduce capital and operating costs and improve project competitiveness, purpose-built infrastructure and industrial clustering, including energy, water, logistics, port and rail infrastructure, and efficient regulatory and investment facilitation mechanisms, including one-stop shops and coordinated permitting processes,” Moses said.
Moses explained that the current SEZ incentive framework provides its strongest value through a combination of the 15% corporate tax rate, customs and Value-Added Tax (VAT) benefits, and the ability to develop industrial clusters around green hydrogen, green ammonia, green steel and other downstream industries.
“Importantly, this aligns with South Africa's Industrial Development Strategy, which seeks to drive industrialisation and beneficiation, and our Spatial Industrial Strategy, which aims to develop new industrial growth nodes linked to ports, renewable energy resources and logistics corridors.”
“If South Africa is serious about becoming a global green hydrogen player, we must move beyond incentives alone,” he said. – SAnews.gov.za
