Understanding and adapting Namibia’s dedicated hydrogen and mining legislation will be necessary to deploying low-carbon hydrogen production. Operating within the country’s rapidly evolving industries like renewable energy, carbon markets and environmental and climate change law, Afrika Jantjies & Associates is a niche law firm that helps its clients navigate sectors without a clear legal and regulatory framework. Energy Capital & Power spoke with Afrika Jantjies, Managing Partner and Chairman, about the path to establishing such a framework in Namibia, with a view to optimizing the country’s hydrogen economy and participating in the global carbon trade market.
What role will dedicated hydrogen legislation and policy structures play in optimizing the development of Namibia’s hydrogen economy?
The absence of dedicated hydrogen legislation and policy structures has been a significant gap in Namibia’s approach to optimizing its hydrogen economy. While the bold decision to adopt and integrate green hydrogen is commendable, the lack of dedicated regulations and policies undermines the potential for seamless development. A dedicated legal framework would provide the clarity and guidance needed for the successful establishment of green hydrogen projects. It would attract more investment, both domestic and foreign, signaling a commitment to sustainable energy initiatives and fostering economic growth. Moreover, dedicated legislation could accelerate the adoption of hydrogen technologies, incentivize research and development, and scale up green hydrogen production. Without such a framework, uncertainty prevails, hindering potential growth and causing missed opportunities for economic progress and technological innovation.
How will demand uncertainty impact the commercial sale of low-carbon hydrogen and its eventual global uptake?
The concept and production of green hydrogen are not novel, with several countries having established infrastructure and technology in this field. For instance, Australia is a global leader in green hydrogen production, utilizing renewable energy resources for electrolysis. Germany also offers lessons, having integrated green hydrogen into sectors like transportation and industrial processes. Namibia’s first green hydrogen production, anticipated in 2026/2027, prompts critical considerations:
- African Export Markets: Learning from Australia’s example, exploring potential African markets is crucial to ensure successful export ventures.
- Industrial Integration: Germany’s experience indicates that industries must adapt to incorporate green hydrogen effectively, fostering economic growth.
- Vehicle Transition: Similar to regions like Japan, Namibia must address vehicle dependency to facilitate a transition to hydrogen-powered vehicles.
- Domestic Transformation: Following the Netherlands’ lead, Namibia’s national energy outlook needs comprehensive transformation to maximize domestic green hydrogen usage.
To what degree can the legislative framework encourage mining companies to participate in the carbon trade market?
The global carbon market is characterized by its diversity, encompassing various components that provide opportunities for financial gain. One significant avenue is the utilization of carbon credits, which can be generated through the adoption of renewable energy sources. Consider the scenario of implementing a 100 MW solar photovoltaic system at a mining site, replacing the prior reliance on power from entities like Eskom, known for coal-based electricity generation. Upon executing such a renewable energy project, a certificate can be issued, and the initiative can be registered for carbon credits. These credits represent an environmentally positive impact and can be set aside. Over time, they can yield financial rewards, offering tangible incentives for sustainable practices. Notably, within the compliance market, the value of carbon credits can range from $50 to $100, or even up to $600 in specific regions, for every metric ton of carbon sequestered and traded.
The legislative framework plays a pivotal role in encouraging mining companies to participate in the carbon trade market. A well-defined legal environment can provide the necessary incentives and regulatory support for such engagement. For instance, countries like Australia have established the Carbon Farming Initiative (CFI), a regulatory system that allows projects like reforestation, renewable energy, and methane capture to generate carbon credits. This framework incentivizes mining companies to adopt eco-friendly practices and renewable energy sources, thereby generating carbon credits that can be traded in the market.
Moreover, the European Union’s Emissions Trading System (EU ETS) exemplifies how a robust legislative setup can stimulate carbon trading. Mining companies within the EU are subject to emission caps and can trade emission allowances. This legal mechanism compels companies to seek emission reduction strategies, such as renewable energy integration, which in turn leads to carbon credit generation and participation in the carbon trade market. A well-crafted legislative framework, akin to Australia’s CFI and the EU ETS, can significantly encourage mining companies to engage in the carbon trade market. By linking renewable energy initiatives to carbon credit generation and facilitating market participation, these legal frameworks drive both financial gains and environmental responsibility.
Energy Capital & Power is a strategic partner of the Namibia International Energy Conference (NIEC) – taking place in Windhoek on April 23-25, 2024. The 6th annual conference unites industry leaders, business executives and policymakers to engage in dialogue, exchange ideas, create new partnerships and identify strategies to foster a prosperous energy industry in Namibia and beyond. For more information, please visit https://www.nieconference.com/
