Africa expands focus from hydrogen exports to industrial use

From the newsletter

Namibia’s green steel producer HyIron has signed an agreement with the national government and Japan’s Toyota Tsusho Corporation to advance a sustainable green iron and steel value chain. The move reflects a growing trend in Africa, where countries see hydrogen as a catalyst for industrial decarbonisation rather than just an export.

• Global pressure to decarbonise the steel sector could push Africa to channel hydrogen into green steel, scaling manufacturing growth and economic diversification. 

• The Namibia project will be a test whether Africa can overcome infrastructure and energy constraints to build hydrogen-based heavy industry beyond pilot projects.

More details

• Under the agreement, the three partners will leverage green iron produced by HyIron Oshivela to establish a zero-emissions green steel value chain. They will also conduct a joint feasibility study on expanding green iron production capacity in Namibia. In addition, the agreement includes exploring the creation of special economic zones and developing critical infrastructure to support the venture.

• Announcing the news on LinkedIn, HyIron described the MoU as a “testament to the power of partnership in driving green industrialisation” and emphasised the partners’ commitment to advancing carbon neutrality, promoting green innovation and building a sustainable future

• “This MoU is a statement of our shared intent and a commitment to demonstrating to the world that sustainable industrialization is not just an aspiration but a technically and economically feasible reality,” the company said.

• The agreement signals a critical test case for Africa’s hydrogen industrialisation narrative. While much of the continent’s hydrogen strategy has centred on exports, green steel represents one of the most commercially attractive and geopolitically relevant domestic applications. The sector faces intense global pressure to decarbonise and Africa’s low-cost renewable resources position Namibia as a potential leader in supplying competitively priced green steel.

• The choice of green iron and steel as a focus area is strategic. Alongside fertiliser, it adds to a growing list of African hydrogen-linked industrial applications. Both are resource-intensive industries that can anchor new value chains and stimulate downstream manufacturing. 

• Beyond Namibia, the agreement reflects a broader continental shift, with African countries increasingly viewing hydrogen not only as an export commodity but also as a driver of domestic industrialisation. All six of Africa’s leading green hydrogen producers have diversified production into green ammonia and fertiliser, while Morocco is developing projects that also produce green steel and industrial fuel. Meanwhile, Mauritania is following Namibia’s example by investing in green iron production.

• This trend reflects both necessity and opportunity. For African nations, relying solely on exporting hydrogen or its derivatives exposes them to volatile global markets and infrastructure challenges. By targeting industries such as steel and fertilisers where decarbonisation is urgent and hydrogen offers a clear pathway, governments can capture more value at home. These sectors can anchor new value chains and strengthen economic resilience, making hydrogen a tool of industrial policy as much as an energy transition strategy.

• Toyota Tsusho’s involvement is strategic and offers a lesson for other African nations. As a global trading and investment powerhouse, the Japanese conglomerate brings both credibility and market access. For Namibia, such collaborations can help unlock financing and accelerate technology transfer, which helps to bridge the gap between pilot projects and large-scale deployment.

• For other African nations, this is a lesson that global partnerships can unlock financing and secure market access. With Japan and other regions seeking reliable supplies of low-carbon materials, African producers that connect domestic hydrogen projects to international demand are better positioned to scale beyond pilot stages.

• However, Africa faces systemic challenges in turning ambition into industry. Building a green steel value chain requires not just abundant renewables but also supportive infrastructure, and policy certainty.  Nonetheless, the MoU appears cognizant of these challenges, as it emphasizes developing related infrastructure.

Our take

• Africa’s pivot from pure hydrogen exports to domestic industrial applications shows the continent is aiming to turn climate ambition into tangible economic growth, especially in steel and fertiliser.

• Building local demand for green hydrogen could help shield African projects from global market volatility, making them more resilient and attractive to investors.

• With hydrogen developments advancing rapidly, it will be intriguing to see which new industrial applications Africa tackles next.