Namibia wants to build the world’s first hydrogen economy

Factories have used fossil fuels to process iron ore for three centuries, and the climate has paid a heavy price: According to the International Energy Agency (IEA), the steel industry today accounts for 8% of carbon dioxide emissions. Purifying the ore involves extracting iron that is bound to oxygen, and “removing the bond between the iron and oxygen requires a massive amount of energy,” says Michels, the 39-year-old CEO of HyIron, the startup behind the project. 

But it turns out there is a less carbon-­intensive alternative: using hydrogen to extract the iron. Unlike coal or natural gas, which release carbon dioxide as a by-product, this process, Michels explains, releases water. And if the hydrogen itself is “green”—meaning it’s made through renewable-­powered electrolysis rather than the conventional technique of mixing natural gas and steam—the climate impact of the entire process will be minimal.

HyIron, which began processing test batches of iron a month after my visit, is one of a handful of companies around the world that are betting green hydrogen can help the $1.8 trillion steel industry clean up its act. What sets it apart, above all, is its location. HyIron’s kiln was designed and prototyped in Germany, but the production site is in Namibia, more than 5,000 miles to the south. This former German colony, which was ruled by South Africa from 1915 to 1990, has little industry itself and is an ocean or two away from the world’s biggest importers of iron. What it does have is immense untapped potential for wind and solar power, which studies suggest could make it possible to produce hydrogen and its derivative products, like iron, ammonia, and low-carbon aviation fuel, as cheaply as is feasible anywhere. HyIron’s site in the Namib Desert, 50 miles from the Atlantic coast, averages just 30 hours of overcast skies per year, Michels tells me. The energy potential here, he says, is “incredible.”

Michels, who trained as an economist and started HyIron as a side project when his family-owned safari lodge went quiet during the covid pandemic, isn’t the only Namibian with big plans for hydrogen. Since 2021, when the government identified the gas as a potentially “transformative strategic industry,” it’s become something of a national obsession. There are at least nine other projects planned or under construction, including one, in Namibia’s south, that’s among the largest proposed green hydrogen investments in the world. The Namibian government’s Green Hydrogen and Derivatives Strategy, released in 2022, envisions the creation of three “hydrogen valleys,” along the southern, central, and northern coasts, with a target production of 10 million to 12 million metric tons per year by 2050. That’s equivalent to more than 10% of all hydrogen made annually today. As soon as 2030, the strategy document claims, the industry could create 80,000 jobs and raise GDP by 30% through a combination of tax revenue, royalties, and the knock-on effect of so many investments. 

If even a fraction of this production comes to pass, it will give Namibia’s economy a major boost. But it is a gamble. Green hydrogen technology is still in its infancy, and long-term demand for its products remains uncertain. Pursuing a technology that isn’t yet commercially established, some critics fear, could strain government resources and distract from more urgent priorities, including the persistence of hunger and a domestic power grid that reaches only half of Namibia’s households. This is especially the case with the largest project under development, along the country’s southern coast, which will require at least $10 billion to get off the ground, a figure nearly as big as Namibia’s GDP today. That venture is contentious for environmental reasons, too: Under current plans, most of its infrastructure will be built inside a national park in a location Namibia’s top environmental watchdog calls the “most sensitive ecosystem in southern Africa.”

“Given the small country that we are, we’re risking quite a lot entering into this global race,” says Ronny Dempers, executive director of the Namibia Development Trust, which advocates for community-based management of natural resources. 

Adding to the uncertainty is the death last year of Namibian president Hage Geingob, the hydrogen strategy’s chief political backer. The new president, Netumbo Nandi-Ndaitwah, who took office in March, hails from the same political party, but multiple people familiar with her thinking told me she’s keener on developing oil and natural gas. 

Nonetheless, HyIron’s launch has given Namibia’s hydrogen ambitions a long-awaited jolt of momentum. 

The question now is whether Namibia’s government, its trading partners, and hydrogen innovators like Michels can work together to build the industry in a way that satisfies the world’s appetite for cleaner fuels—and also helps improve lives at home.

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