Pretoria: The Department of Trade, Industry and Competition's Acting Chief Director of Special Economic Zones, Shaun Moses, has emphasized the transformative potential of Special Economic Zones (SEZs) in establishing South Africa as a leading producer of green hydrogen. Moses revealed that the SEZs should be restructured into a Hydrogen Industrial Hub model to leverage their benefits and provide production incentives, infrastructure guarantees, accelerated permitting, and localization support.
According to South African Government News Agency, Moses articulated this vision during a panel discussion on SEZs Policy at the Africa Green Hydrogen Summit in Cape Town. He posited that transitioning from a generic SEZ model to a Hydrogen Industrial Hub could position South Africa as a globally competitive manufacturing and beneficiation platform for the entire hydrogen value chain.
Moses highlighted the expanded role SEZs could play in creating an integrated, investment-ready environment conducive to hydrogen production, beneficiation, manufacturing, logistics, and associated value chains. The SEZ programme serves as a crucial industrial policy framework aimed at supporting manufacturing, attracting investments, and promoting industrial growth.
He pointed out that the competitiveness of green hydrogen projects would rely on several enabling factors, such as access to purpose-built infrastructure, renewable energy, transmission, ports, logistics, industrial clustering, and streamlined regulatory processes. Effective coordination across national, provincial, and municipal institutions is also essential.
Moses noted that SEZs could act as strategic drivers to integrate these conditions, thereby reducing project development risks. Key components of a supportive SEZ environment include targeted fiscal and investment incentives designed to lower capital and operating costs, improve project competitiveness, and promote industrial clustering, including energy, water, logistics, port, and rail infrastructure. Efficient regulatory and investment facilitation mechanisms, such as one-stop shops and coordinated permitting processes, are also vital.
He elaborated that the current SEZ incentive framework offers substantial value through a mix of a 15% corporate tax rate, customs and Value-Added Tax (VAT) benefits, and the ability to develop industrial clusters focused on green hydrogen, green ammonia, green steel, and other downstream industries. These efforts align with South Africa's Industrial Development Strategy and Spatial Industrial Strategy, which aim to drive industrialization, beneficiation, and develop new industrial growth nodes tied to ports, renewable energy resources, and logistics corridors.
Moses concluded by stressing the importance of moving beyond incentives alone if South Africa is to become a leading player in the global green hydrogen market.