South African petrochemicals company Sasol on Tuesday said it was partnering steelmaker ArcelorMittal South Africa to explore carbon capture technology and steel production using green hydrogen.

Green hydrogen, produced from splitting water into hydrogen and oxygen using renewable energy sources such as solar and wind, is considered a cleaner energy source for the future, but the technology is still in its infancy and relatively expensive.

Sasol is the world’s biggest producer of fuel products and chemicals from coal, but is transitioning away from the fossil fuel as part of its decarbonisation plan. ArcelorMittal South Africa is Africa’s biggest steel producer, with a significant carbon footprint.

In a statement, Sasol said the two firms would jointly advance a green hydrogen and derivatives study on the Saldanha region’s potential as an export hub for green hydrogen and derivatives, as well as green steel production.

They will study the use of renewable electricity and green hydrogen to convert captured carbon from ArcelorMittal’s Vanderbijlpark steel plant into sustainable fuels and chemicals, it said.

“These studies are anchored by the local need for green hydrogen and sustainable products, cementing Sasol as the leading contributor to the development of southern Africa’s green hydrogen economy,” said Priscillah Mabelane, Executive Vice President for Energy.

The initiatives could see ArcelorMittal South Africa becoming Africa’s first green flat steel producer using green hydrogen from its Saldanha works, which are currently under care and maintenance, while also reducing the carbon footprint of its flagship Vanderbijlpark works.

“These potential projects are an important kick-start to our decarbonisation journey and create an exciting opportunity to contribute to the South African government’s aspirations to transition to a green economy,” said Kobus Verster, chief executive of ArcelorMittal South Africa.