Namibia drags feet on green energy laws
Synthetic Fuels Act not finalised
Feasibility studies will commence once the implementation agreement is concluded and signed.Despite entering its second year of advocating for green hydrogen as a fuel of the future, Namibia still lacks a legal framework governing synthetic fuels.
Moreover, the country has yet to sign an implementation agreement with Hyphen Hydrogen Energies. This is according to Frans Kalenga, a senior manager for sustainable energies at the National Petroleum Corporation of Namibia (Namcor) and a technical advisor on green hydrogen to the mines and energy ministry.
Kalenga explained that measures are in place allowing government to take out some equity beyond mere royalty payments and tax dues from the green hydrogen space; however, the incentives and corporate taxes will be outlined by the yet-to-be-finalised Synthetic Fuels Act. “All this is left for the birth of the Synthetic Fuels Act. Stakeholder engagements have already commenced at the end of the second quarter of this year, so we would have an idea of what a typical Act would look like and to communicate that to the investors. However, that should not stop us from proceeding with the current projects. That is just one of the components; green hydrogen is very large; we have the legal framework existing; we just have to consolidate them so they become one law for that industry,” he said.
In the works
In 2021, Namibia chose Hyphen as the preferred bidder to develop the country’s first large-scale, vertically integrated green hydrogen project in the Tsau //Khaeb National Park at an estimated cost of US$9.4 billion (N$154.6 billion), with the aim of producing 300 000 tonnes of green hydrogen per year for regional and global markets. “Since then and up to now, we are about to conclude the implementation agreement that we are to sign so that the feasibility studies can commence. Roughly by the second quarter of the year, we would like the feasibility study to kick off,” he said.
Kalenga also said government is looking at setting up an implementation office to oversee the development of a regulatory framework and create an environment that is conducive to attracting investors in the field of synthetic energy.
Synthetic energy, also known as green hydrogen, is a form of energy produced from renewable sources such as solar, wind, or hydro power. It is considered critical for the world’s transition towards a low-carbon economy as it has the potential to contribute significantly to the reduction of greenhouse gas emissions.
Carlo McLeod, deputy director of compliance, regulations and economics in the mines and energy ministry, also confirmed that government has yet to conclude the draft local content policy that would allow Namibia to benefit from the new discoveries outside of royalty and tax payments.
According to him, they are working on ways to ensure these resources are meaningful to the lives of Namibians, how to manage the expectations of Namibians, and how to hold oil companies accountable to their obligations to add value.
“The idea is for Namibia not to benefit only from taxes and royalties. Sometimes when investors come into the country, they would always use the opportunity to say they will bring in their own skills because the country does not have the capacity. This is something the country will not take likely; we have been deliberate with skills transfer,” he said.
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