2 April 2025
Colette van der Ven and Claudia Azevedo
TULIP Consulting and Europe Jacques Delors
During the EU-South Africa summit in March 2025, the Commission launched negotiations with South Africa to develop a Clean Trade and Investment Partnership (CTIP). This would be the first CTIP the EU will negotiate. CTIPs are meant to be a more tailor-made, flexible partnership engagement model focused on securing access to critical raw materials, clean energy and clean technology while establishing mutually beneficial outcomes. While many elements of these partnerships remain unclear – including their legal nature and governance structure – the announcement of the EU-South Africa CTIP provides initial insights into what we can expect from these novel partnership instruments. In the case of South Africa, a key interest for the EU seems to be accessing green hydrogen. This presents important export and employment opportunities for South Africa but should not come at the expense of sustainable development and the greening of domestic industries.
Unpacking the official announcement
The new Commission has proposed engaging with trading partners through CTIPs, a new and more flexible partnership model for strategic engagement on issues like raw materials, clean energy, and clean technologies, complementing free trade agreements. As the first EU partnership of its kind, the EU-South Africa CTIP will set a precedent for future partnerships, and other trading partners will be watching.
As outlined in the Summit’s final joint statement, the EU-South Africa CTIP aims to "support the development of strategic cleaner value chains for raw materials, including local beneficiation, renewable and low-carbon energy (including safe and sustainable low-carbon hydrogen), and clean technology by improving the conditions for mutually beneficial investment". In her opening remarks, President von der Leyen highlighted South Africa’s resource wealth, including 91% of the world’s platinum metal reserves, alongside its clean energy potential and growing green hydrogen economy.
Emphasising the need to deliver a mutually beneficial partnership, she stated: "Our model is that we want to support local jobs, local added value and high environmental and labour standards". Accompanying the CTIP announcement was a €4.7 billion Global Gateway Investment Package, with the biggest bulk of the package, €4.4 billion, earmarked for projects supporting South Africa’s energy transition. Several other initiatives were also announced, including a new bilateral energy dialogue, cooperation on research and innovation through the Clean Hydrogen Mission, and negotiations for a Memorandum of Understanding on raw materials.
While details on the partnership's substance and structure remain limited, the EU’s choice of South Africa as the first CTIP partner seems driven, at least partly, by its potential for green hydrogen commercialisation and export. Green hydrogen plays a key role in decarbonising hard-to-abate industries, like steel and chemicals, and is a priority for both parties. South Africa is well-placed to lead on green hydrogen production with abundant solar and wind resources and the world’s top platinum reserves – essential for hydrogen technologies like electrolysers and fuel cells. The country is actively pursuing a green hydrogen economy under its national Green Hydrogen Commercialisation Strategy while cooperating regionally through the Africa Green Hydrogen Alliance (Angola, Djibouti, Egypt, Ethiopia, Kenya, Morocco, Mauritania, Namibia, Nigeria, South Africa). While primarily focused on expanding green hydrogen exports, these initiatives also aim to support the long-term decarbonisation of domestic industries. Meanwhile, the EU has set its own green hydrogen targets under the REPowerEU Strategy, including the goal to import 10 million tonnes by 2030.
There is potential for the development of green hydrogen in South Africa to be a win-win for both the EU and Africa. The EU's investment in the sector can be instrumental in commercialising green hydrogen, whose cost-competitiveness, especially compared to alternative fossil-based fuels, remains challenging. It is projected that, by 2050, the development of a national hydrogen economy could contribute 3.6 per cent of South Africa’s GDP and create 389,000 jobs. While green hydrogen can offer economic opportunities and play a critical role in South Africa’s energy transition, it also poses risks. Although the Summit’s declaration liberally uses the term "safe and sustainable low-carbon hydrogen" and von der Leyen’s statements emphasise local beneficiation and value addition, they fail to acknowledge the importance of developing green hydrogen for domestic consumption. Rather, the declaration stresses the need for the CTIP to support the decarbonisation of Sasol, South Africa’s petrochemical giant with multiple hydrogen and ammonia projects, and “deliver short- and long-term solutions without delay to enable Sasol to export sustainable fuel, especially aviation fuel to the EU”.
What’s at stake for sustainable development
The social and environmental implications linked to green hydrogen production are also missing from official statements. Producing green hydrogen requires vast amounts of water, land, and energy, and has been associated with cases of land grabbing and destruction of coastal fishing grounds by hydrogen plants and ports in South Africa, often with little consultation of local communities. As discussed in our recent paper, CTIPs should address the broader tiple planetary crisis – not just decarbonisation. Concretely, in South Africa’s case, this means including meaningful commitments to biodiversity conservation, sustainability impact assessments, human rights of local communities affected by new green hydrogen and mining projects, and provisions on water management and energy access, among others.
In terms of design, to avoid the CTIPs becoming another “soft tool” in the EU’s toolkit, they should be developed as legally binding agreements – or become binding over time - with a targeted scope and enforceable sustainability and financial commitments. Doing so would set CTIPs apart from existing models, like strategic partnerships on raw materials that lack teeth and financial baking. Setting clear targets from the outset will also be critical for monitoring progress and assessing the partnership’s success. For example, a share of Global Gateway projects could be dedicated to expanding renewable energy for domestic use and decarbonising heavy industries. More concretely, the CTIPs could facilitate the decarbonisation of South Africa’s iron and, steel and aluminium sectors, which are particularly exposed to the EU Carbon Border Adjustment Mechanism (CBAM). Once CBAM enters its definitive phase, these sectors risk facing substantial financial contributions when exporting to the EU, potentially making them uncompetitive. Meanwhile, EU industries could benefit from South Africa’s green hydrogen exports to decarbonise their own hard-to-abate sectors. Regulatory cooperation would also be important. The parties should also explore opportunities to increase exports of higher-value, semi-finished products, such as green iron and steel produced using South African green hydrogen. This would not only enable South Africa to capture a larger share of the benefits from its resources but could also make sense from a technical and economic perspective, as some studies focused on green iron and steel in North Africa have shown.
Finally, the EU has already engaged with South Africa through other initiatives, such as the Just Energy Transition Partnership (JETP), while bilateral trade is governed by the EU-Southern African Development Community (SADC) Economic Partnership Agreement. At the Summit, the CTIP was introduced as a complement to the EU-SADC deal, aiming to boost trade in sustainable fuels, South African Electric Vehicles, and hybrid vehicles. However, its interaction with existing and newly announced EU initiatives remains unclear. To be effective, CTIPs should act as a coordination framework rather than adding another layer of bilateral engagement to help identify gaps, streamline financing, and maximise EU efforts in the country. As outlined in our paper, achieving this will require a strong governance structure.
Way forward
With the announcement of the first-ever CTIP, the EU Commission has laid the groundwork for a new chapter in EU-South Africa relations. As leaders on both sides prepare to meet again this November on the margins of the G20 summit, the stakes are high. In a time of geoeconomic competition and rising trade tensions, pursuing an ambitious and mutually beneficial partnership will require strong political leadership on both sides. The EU-South Africa CTIP has the potential to deliver for people and planet, provided that it is grounded in a solid legal basis, incorporates meaningful sustainability commitments beyond decarbonisation, and ensures green hydrogen can deliver for both domestic and export markets.
This Article was first published here by Europe Jacques Delors.
For more information about CTIPs, visit the authors' earlier publication, "A new era of mini trade deals? Reprioritizing sustainable development through CTIPs."
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