South Africa’s green hydrogen ambitions are becoming less about producing another energy source and more about building an industrial base around it.

Speaking at the Africa Green Hydrogen Summit in Cape Town, Trade, Industry and Competition Minister Parks Tau said government views green hydrogen as part of a broader industrialisation agenda, alongside sustainable aviation fuel, green chemicals, green shipping fuels, advanced manufacturing and new export industries.

For South Africa’s supply-chain industry, that distinction matters.

The opportunity is not simply to produce hydrogen and send it overseas. It is to develop the infrastructure, manufacturing capacity and supporting industries needed to produce, move and use it.

Building an Industry Around Hydrogen

Green hydrogen does not exist in isolation. Producing it at scale requires renewable energy, specialised equipment, infrastructure and facilities capable of handling the resulting products.

That creates potential demand across a much wider industrial network.

South Africa will need companies that can supply equipment and components, develop and maintain production facilities, provide storage and transportation solutions, and support the conversion of hydrogen into products such as green ammonia and sustainable fuels.

The more of that value chain that can be developed locally, the greater the potential economic impact.

This is central to the government’s stated industrialisation approach. The Department of Trade, Industry and Competition’s green hydrogen strategy positions hydrogen alongside other industries that could help South Africa move further up the value chain and export more value rather than raw resources.

Investment is Beginning to Move

There are already signs that the infrastructure behind the sector is starting to take shape.

Through the Just Energy Transition Investment Plan programme management office at the Industrial Development Corporation, government has identified 24 strategic integrated projects, several of which have already reached the pre-feasibility stage. The projects are backed by €40 million from Germany’s KfW Development Bank.

In August, Climate Fund Managers closed the first R3 billion of the South Africa Green Hydrogen Fund. A further R628 million in grants has also been made available through the European Union’s Global Gateway programme.

Of that funding, R490 million is intended to leverage investment in hydrogen infrastructure, with government projecting that it could mobilise a further R10 billion. Another R138 million is intended to help Transnet green its own operations.

These investments matter because an industrial supply chain cannot develop around projects that remain disconnected from the infrastructure needed to support them.

Six Projects Move the Sector Closer to Implementation

The scale of the opportunity is becoming clearer as government moves its first six priority projects forward.

Announced on 15 September, the first wave covers several parts of the green hydrogen value chain, including sustainable aviation fuel, green ammonia, lower-emissions iron and steel, green methanol and domestic hydrogen demand.

The Phelan Green Group electro-Sustainable Aviation Fuel project in Saldanha Bay has reached a final investment decision after securing an off-take agreement and a $100 million equity commitment. Construction is expected to begin in the first quarter of 2027, with first exports targeted for the first quarter of 2029.

The other five projects are at different stages of development. The Coega Green Ammonia Project has completed early preparatory work but requires further commercial, technical and financing work before reaching a final investment decision. The Saldanha Hydrogen Direct Reduced Iron Project is at pre-feasibility stage, while the Prieska Power Reserve is at development stage.

The Green e-Fuels Producers Green Methanol Corridor is at pre-feasibility stage and is targeting European demand, while Green Hydrogen Solutions, which is focused primarily on South African demand, has completed front-end engineering design.

The significance for supply chains is that these projects extend beyond hydrogen production itself. Government says the wider green hydrogen economy should support industries including fertiliser, green iron and steel, sustainable fuels, equipment, engineering and related services. The full announcement on South Africa’s first six priority green hydrogen projects provides more detail on their respective stages.

That means a successful hydrogen economy could require an entire network of businesses and infrastructure around it.

Coega Could Provide a Glimpse of What Comes Next

One project that illustrates this approach is the Coega Green Ammonia Project, which government has identified as South Africa’s lighthouse green hydrogen project.

Through the Critical Infrastructure Programme Fund, the dtic is supporting Hive Hydrogen in developing the project. Hive Hydrogen has completed financial due diligence, unlocking R12.5 million of an initial R25 million in project-development funding, with a further R25 million funding application expected at financial close.

The importance of projects such as this extends beyond the production facility itself.

A large-scale green ammonia operation requires connections to energy infrastructure, industrial facilities, storage, transport and ultimately domestic or international customers. Each connection creates another part of the supply chain that needs to function effectively.

The Opportunity Goes Beyond Exports

South Africa has significant potential to become an exporter of green hydrogen-related products, but an export strategy on its own would leave much of the potential value outside the country.

The broader industrialisation approach creates another possibility.

Green hydrogen could support the development of industries that manufacture equipment, process raw materials, produce chemicals and fuels, and provide specialised technical and logistics services.

That could create a more complex industrial ecosystem in which companies supply one another rather than simply extracting resources and shipping them elsewhere.

President Cyril Ramaphosa has also called for greater local procurement, manufacturing, employment and skills transfer, arguing that Africa should participate across the hydrogen value chain as an owner, manufacturer, technology partner and producer. His announcement on the first wave of green hydrogen projects sets out the government’s position on local participation in the sector.

Government says South Africa’s industrial transition pathways point to tens of thousands of additional jobs and billions of rand in economic activity over the years ahead. These are projections rather than outcomes, but they highlight the scale of the ambition.

The Supply Chain Will Determine How Much Value Stays Here

Turning that ambition into an industrial reality will require more than funding individual hydrogen projects.

Renewable energy needs to reach production facilities. Equipment needs to be manufactured or imported and delivered. Hydrogen and its derivatives need to be stored and transported. Ports and export infrastructure need to handle new products. Manufacturers need reliable access to energy and inputs, while customers need a dependable route to market.

That makes coordination critical.

South Africa’s green hydrogen opportunity is therefore also a supply-chain opportunity. The country is not simply deciding whether it can produce green hydrogen. It is beginning to build the network of industries and infrastructure that could determine how much value that hydrogen creates before it leaves the country.

The success of the sector may ultimately be measured not by how much hydrogen South Africa produces, but by how much industrial activity develops around it.

South African cherry growers can now sell into China for the first time, opening a major new market for the country’s growing cherry industry.

Agriculture Minister Willie Aucamp signed the market-access protocol with China’s General Administration of Customs in Beijing on 8 September. China imported about 586,900 tonnes of cherries worth US$3.3 billion in 2025, making it the world’s largest cherry importer.

For South Africa’s supply-chain industry, however, the interesting part starts after the agreement is signed.

Getting cherries from an orchard to a Chinese buyer requires a coordinated journey involving harvesting, packing, temperature-controlled logistics, road freight, export procedures, international shipping and distribution.

For a perishable product, every stage matters.

From Orchard to Packhouse

The export journey starts with producing fruit that meets the requirements of the destination market.

The new market-access protocol establishes the framework for South African cherries to enter China and forms part of the sanitary and phytosanitary arrangements governing agricultural trade between the two countries.

Once harvested, cherries need to move quickly through packing and preparation. The fruit then enters a temperature-controlled supply chain designed to maintain its condition while it travels towards the export gateway.

This makes logistics more than a transport function. Delays at the farm, packhouse, storage facility or during transport can reduce the time available for the rest of the journey.

The Journey to the Export Gateway

Where the cherries are grown will influence how they reach international markets.

South Africa’s cherry industry has expanded significantly in recent years, with planted area increasing from 185 hectares in 2012 to 819 hectares in 2024, according to industry body Hortgro.

As production grows, so does the logistics network needed to support it.

More fruit means more movement between farms and packhouses, greater demand for cold storage and additional transport capacity to connect production areas with export gateways.

The opening of China could therefore create opportunities beyond the growers themselves.

Then Comes the Export Process

Physical movement is only part of getting the cherries into China.

South African exporters also need to meet customs and origin requirements.

South Africa’s temporary zero-tariff arrangement with China came into effect on 1 May 2026. Qualifying exports can receive zero-tariff treatment if they meet the applicable rules of origin, although some tariff lines are subject to quotas.

SARS issues the Rules of Origin certificates required for qualifying exports. Exporters must also maintain the required documentation and comply with the scheme’s conditions to receive the tariff benefit.

For the supply chain, this means a shipment can be physically ready to leave South Africa but still be unable to move as planned if the documentation and customs requirements are not in order.

China is Only Another Link in the Chain

Once the cherries arrive in China, the journey is not over.

The shipment still needs to clear the relevant authorities, reach importers and move through China’s distribution network before reaching its final buyer.

That makes coordination across the entire journey particularly important.

A delay in South Africa does not simply mean a later departure. It reduces the time available for every stage that follows.

A New Market, And A New Logistics Opportunity

The Department of Agriculture expects the opening of the Chinese market to stimulate further investment in cherry production and estimates that it could create about 600 new jobs.

If production expands, the supporting supply chain will need to expand with it — from packhouses and cold storage to road freight, export services and international logistics.

That is what makes the agreement significant beyond agriculture.

South Africa now has access to a major new market. The next challenge is building a supply chain capable of getting those cherries there on time, in good condition and at a competitive cost.

When fuel prices rise, the first cost most businesses notice is the fuel bill. For companies moving goods around South Africa, however, that is only the beginning.

Transport sits underneath almost every part of the supply chain. Raw materials have to reach factories, finished products have to reach warehouses, goods have to move between distribution centres and retailers need stock delivered to their stores.

That means an increase in fuel costs can work its way through several stages before a product reaches the customer.

The Competition Commission’s latest Cost of Living Report highlights just how significant that pressure has become. Petrol prices increased by 26% between January and July 2026, with higher fuel and transport costs adding to production, logistics and distribution costs across the economy.

So where does that extra cost actually go?

It Starts With the Truck

For a transport operator, higher fuel prices are an immediate operating cost.

A truck still has to travel the same distance, carry the same load and use roughly the same amount of fuel. If diesel becomes more expensive, the cost of making that journey increases.

Fuel is not the only cost involved. Trucks also require maintenance, tyres, insurance, drivers and financing. But fuel is one of the costs most directly affected by changes in international oil markets and local fuel pricing.

Transport companies therefore have to decide how much of an increase they can absorb and how much needs to be reflected in their rates.

That is where the cost starts moving through the wider supply chain.

The Raw Material has to Get There Too

Consider a manufacturer producing a food product.

Before anything reaches the factory, ingredients, packaging and other materials may have travelled considerable distances. Those goods could have been transported from farms, processors, ports, importers or other manufacturers.

Higher transport costs can therefore appear before production has even started.

The manufacturer then has its own transport requirements. Finished goods need to leave the factory and move to a warehouse, distribution centre or directly to a customer.

The same fuel increase can consequently affect a product more than once as it moves through the network.

That is one reason why transport costs cannot be viewed in isolation.

Warehouses Don’t Make the Problem Disappear

It is easy to think of a warehouse as the point where transport temporarily stops.

In reality, goods may enter and leave a warehouse several times before reaching their final destination.

A product could arrive from a manufacturer, be stored, moved to another distribution centre and then delivered to a retailer. Each movement involves transport.

Warehousing itself also has costs, including electricity, labour, equipment and property. But transport remains part of the equation whenever goods need to be moved in or out.

For businesses operating large distribution networks, even relatively small increases in the cost of each journey can add up quickly.

Then the Product Reaches the Retailer

By the time a product arrives at a shop, its journey may already have involved several transport legs.

That does not mean the retailer simply adds every additional transport cost to the shelf price.

Businesses have different margins and different levels of bargaining power. Some may absorb part of the increase. Others may negotiate new prices with suppliers or transport providers. Some costs may be spread across a large number of products.

The important point is that there is no single point where a fuel-price increase becomes a retail-price increase.

It moves through a network of commercial decisions.

That is why two products can be affected differently by the same increase in fuel costs.

Distance Matters

The impact is also not the same for every business.

A manufacturer located close to its customers may have a very different transport profile from one that relies on long-distance road freight.

A retailer supplied from a nearby distribution centre faces different costs from one receiving stock from hundreds of kilometres away.

The same applies to imported goods. Products arriving through a South African port may still need to travel significant distances by road or rail before reaching a warehouse or customer.

The further a product has to travel, and the more times it has to be moved, the more opportunities there are for transport costs to influence the overall cost of getting it to market.

Not Every Increase Reaches the Customer Immediately

There is another reason the relationship between fuel and prices is more complicated than it first appears.

Businesses do not necessarily change their prices every time fuel moves.

A transport contract may have a fixed period. A manufacturer may have already purchased its inputs. A retailer may have stock sitting in a warehouse that was transported under an earlier cost structure.

This creates a delay between a change in transport costs and its eventual effect elsewhere in the supply chain.

It can also work in reverse.

When fuel costs fall, businesses may not immediately reduce prices because other costs have changed, contracts have not yet been renegotiated or existing stock was purchased when transport was more expensive.

The Competition Commission has raised concerns about this pattern in several essential markets, noting that some prices can rise quickly when costs increase but fall more slowly when those costs decline.

The Cost Doesn’t Always Stop With Transport

This is where the bigger supply-chain picture becomes important.

A transport cost increase can affect more than the price of moving a product.

If logistics becomes more expensive, businesses may reconsider how frequently they replenish stock, how much inventory they hold, which suppliers they use or where warehouses are located.

A manufacturer might look for a supplier closer to its factory. A retailer might review delivery routes. A logistics operator might try to improve vehicle utilisation to make each trip more productive.

In other words, rising transport costs can change decisions throughout the supply chain, not simply the price charged for a truck journey.

Can Businesses Reduce The Impact?

They cannot control the international oil price, but they can control how efficiently they use transport.

Better route planning can reduce unnecessary kilometres. Higher vehicle utilisation can spread the cost of a journey across more goods. Better load planning can reduce the number of trips required.

The same applies to the wider network.

If a business can source some products closer to its customers, reduce empty return journeys or position stock more strategically, it may be able to reduce the amount of transport required in the first place.

These decisions become more important when fuel prices are high.

The Question Isn’t Just What Transport Costs

South Africa’s latest fuel-price shock is a useful reminder that transport is woven into almost every part of the economy.

The question for businesses is therefore not simply “How much more will our trucks cost?”

It is “How much more will it cost to move everything our business needs, and how many times will those goods have to move before they reach the customer?”

That is a much bigger calculation.

For supply-chain managers, the answer may involve changing routes, suppliers, warehouse locations, delivery schedules or inventory strategies.

For consumers, the eventual impact may simply appear as a higher price on the shelf.

Between those two points is an entire supply chain — and that is where the extra cost goes.