South Africa-based Sasol and Japan-based ITOCHU Corporation have signed a Memorandum of Understanding (MoU) jointly to study and to develop the market and supply chain for green ammonia with a focus on its use as bunkering fuel and for power generation.

The parties will also evaluate ITOCHU’s potential involvement and participation in Sasol’s green ammonia export-oriented project(s), including product offtake as well as financial support from Japan for studies and grants relating to green ammonia projects in South Africa.

The MoU was signed during the Tokyo International Conference on African Development (TICAD 8) in Tunisia, a forum to advance Japan-Africa sustainable development on the continent. MUFG Bank Ltd, one of the largest Financial Institutions in the world, and a market leader in sustainable financing solutions, witnessed the signing of the MoU.

Green ammonia is produced from green hydrogen, which in turn is produced from renewable electricity (solar and wind) via an electrolysis process. It is a key enabler to achieving net-zero in manufacturing fertilizers, in the marine sector where it can be used as a zero-carbon bunkering fuel, and for co-firing in thermal power generation. Green ammonia is an excellent energy carrier especially over long-distances and can be easily transported. The product can also be cracked back to hydrogen gas for further applications.

Sasol is advancing a number of green hydrogen studies and projects in South Africa, such as in Boegoebaai in the Northern Cape province, that include green ammonia production at scale for export. Given South Africa’s excellent solar, wind and precious metals resources, the country is poised to become a global hub for green hydrogen and its derivatives, such as ammonia and sustainable aviation fuels.

Hydrogen and ammonia play an important role in the Japanese Green Growth Strategy and are positioned as new resources with significant potential to reduce the country’s reliance on carbon-intensive fossil fuels, such as coal and oil. Japan is expected to be a large importer of green ammonia in the future.

ITOCHU has been strengthening initiatives for the establishment of production and supply chains for low-carbon ammonia, the development of ammonia-fueled ships and establishment of an international value chain for ammonia as a fuel in the marine sector and its use for fertilizer-related applications as well as in the power-generation sector. Using the MoU as a platform, ITOCHU, together with Sasol, will jointly study supply chains and markets for green ammonia, and assess other partnership models related to green hydrogen and ammonia production and exports from South Africa.