South Africa’s vanadium redox flow battery (VRFB) value chain currently lies in raw material output, electrolyte production, and locally manufactured balance of plant components. However, there is potential for a more significant role to be played along the value chain. To foster the growth of a domestic VRFB industry, it is crucial to implement measures that support both demand and supply. The increasing demand for electrification in Africa, and globally for long duration storage, creates an opportunity for VRFBs to enhance energy supply. VRFBs present a compelling commercial opportunity for use in storage due to their safety, use of recyclable electrolytes, and extended cycle life, among other advantages. This study examines the growth potential of a South African VRFB value chain. The analysis is particularly relevant given the rapid expansion of the global VRFB industry.The research explores the practicality of developing a sustainable VRFB market and supply chain in South Africa, integrated with renewable energy generation, while improving energy supply and security.

See Policy Brief: A review of vanadium redox flow battery (VRFB) market demand and costs

Renewable energy sources combined with energy storage play a vital role in South Africa's pursuit of energy security and achieving its net-zero objective by 2050. As South Africa grapples with a deepening energy crisis, energy storage technologies are gaining prominence, with batteries taking precedence in the short to medium term. Given the growing need for grid storage and the capability of VRFBs to meet demand for applications requiring extended storage duration, this policy brief investigates the potential benefits of VRFBs in addressing local market requirements for energy security. It examines the key cost drivers of VRFBs, with a focus on the vanadium price and provides recommendations for reducing the costs associated with VRFB systems.

See Main Research Report: Localising vanadium battery production for South Africa's energy security

This paper looks at the potential increase in regional gains, particularly in Lesotho and South Africa, through the wool value chain, with the aim of increasing regional productivity and the distribution of wealth through wool production. It also looks into the constraints that domestic, regional and international demand pose for the wool industry in both countries. However, it finds that the value chain seems to be collapsing between the two countries and that the wool industry in both countries is facing a downward trajectory. Last, it makes recommendations on possible priorities for the sector, given the existing and emerging challenges within the wool industry.

The fundamental importance of the coal value chain to the South African economy means that its dual crises required a consistent, strategic and whole-of-government response. This study aims to provide a holistic analysis of the value chain as the basis for developing more strategic options. It first outlines the scope of the coal value chain and its impact on the economy overall. It then describes the disruption in the electricity supply, and the impact of the climate emergency. Finally it reviews factors in the policy environment that made it more difficult to establish a coherent and strategic national response to the disruptions in the coal industry. Based on this analysis, the conclusions outline the implications for policy options.  

Press release: The transition away from coal is inevitable – a delay could cause more damage

Industrial policy in South Africa faces the challenge of overcoming profound inequalities while building a more dynamic, productive and competitive economy. In this context, the current disruption in the electricity system provides both opportunities and threats. This paper reviews the nature, impacts and causes of the disruption as the basis for understanding the implications for policies to promote inclusive industrialisation.

This policy briefs aims to provide an overview of the characteristics of the vulnerable groups in the petroleum-based transport value chain; an understanding of the dimensions of the impact and expected timeframes for the transition; and an overview of the proposed resilience plans. It first looks at the characteristics of those who are employed in the value chain, or are involved in business. It then explores the dimensions of the impact and the timeframes as they are currently available.

This case study focuses specifically on the emerging export opportunities for South Africa in the development of green hydrogen. This refers to hydrogen that is produced through the process of electrolysis that is combined with a renewable energy source of power. While green hydrogen development has gone through a number of historical waves of interest, the current momentum is being driven globally, with a number of countries developing hydrogen roadmaps and strategies to capitalise domestically and in the global marketplace.

It is part of a research project for the Department of Trade, Industry and Competition examines the vulnerability of South African trade to evolving climate change legislation. It aims to shed light on the trade-related risks faced by South Africa as a result of the global transition to a low-carbon economy. From a trade and industrial perspective, this transition has implications on the composition and dynamics of entire value chains. This concerns what inputs are accessed, the processes that underlie production, what goods and services are produced, as well as what happens to these products post-consumption. The research is available in a number of related documents.  A main report on The global climate change regime and its impacts on South Africa's trade and competitiveness: case studies on various sectors; detailed briefs that explore South Africa’s trade risks with different countries; and key data in Excel format. 

These reports are available here: Climate change and trade risk.

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UNU WIDER Research Brief

This policy brief, Unlocking a regional plastics value chain between Mozambique and South Africa, forms part of the project: Southern Africa – Towards Inclusive Economic Development (SA-TIED)

Plastics are universal and integrated into different sectors of the economy. Industrial policy requires countries to look at moving up the value chain and producing progressively more sophisticated products to contribute to improved economic development. The input materials that are used for industrial development need to be priced appropriately to unlock all the opportunities along the value chain.

Available online at: https://www.wider.unu.edu/node/238231

The PDF: https://www.wider.unu.edu/sites/default/files/Publications/Research-brief/Image/SA-TIED-RB2020-14-unlocking-regional-plastics-value-chain.pdf

This brief is based on WIDER Working Paper 148/2020 Future-proofing the plastics value chain in Southern Africa, by Liako Mofo.

WIDER Working Paper 2020/148

This working paper, Future-proofing the plastics value chain in Southern Africa, forms part of the project: Southern Africa – Towards Inclusive Economic Development (SA-TIED)

Abstract

Plastics are ubiquitous across the region and play an important role in multiple industries. Most plastic products are based on a value chain that is grounded in petroleum refining, posing an environmental challenge. Plastic manufacturing in South Africa suffers from the high cost of polymers as inputs. Mozambique is endowed with large natural gas deposits.  

This research assesses the potential for the sustainable development of a plastics value chain in Southern Africa, with the aim of future-proofing the industry against changes in the petroleum space while bolstering growth in plastics manufacture and fostering a more equitable regional distribution of plastics activities. This study found that there is strong regional value chain potential between South Africa and Mozambique, with Mozambique producing natural gas feedstock and South Africa providing labour, capital, and technology. South African plastic manufacturers could also benefit from better input prices derived from better priced natural gas from Mozambique.

Download Working Paper: https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2020-148.pdf

A Policy Brief based on the working Paper is also available: Unlocking a regional plastics value chain between Mozambique and South Africa

TIPS acknowledges the support of the SA-TIED programme for this working paper, with special thanks to UNU-WIDER and the South African Department of Trade and Industry.

This policy brief aims to lay the ground for a just transition in South Africa’s metals value chain as it pertains to climate change only. It contributes to understanding: a) the nature of the impacts facing the value chain; b) the characteristics of the stakeholders at risks (namely workers, communities and small businesses); and c) the nature of the resilience plan which is required to ensure a just transition.

With greenhouse gas (GHG) emissions coming to the fore of nations’ climate policy concerns, the wine industry faces a new challenge. Viniculture (grape cultivation for winemaking) is directly susceptible to climate change impacts due to grapevines being highly sensitive to the surrounding environment, such as changes in weather patterns. In addition, the industry is increasingly targeted by climate change response measures, aimed at reducing GHG emissions. Such measures are poised to significantly alter traditional methods of production. Trade-related climate change response measures, such as shifts in import-export patterns, border carbon adjustments or non-tariff barriers (such as standards), are increasingly more prevalent. Accordingly, “green protectionism”, i.e. the justification of protectionist measures under the guise of addressing climate change and other environmental goals, is also becoming more prevalent internationally.

This paper unpacks the green protectionism dynamics affecting the domestic wine value chain that stand to be a growing risk moving forward. The paper also explores the factors that make it particularly difficult and yet necessary for South African producers to adapt to this new genus of regulation.

Report produced by TIPS for the Department of Trade, Industry and Competition.

Media Article

What wine industry can do to keep its fizz amid rising threats - Business Day - 5 August 2020 by Gaylor Montmasson-Clair and Kudzabi Mataba

With greenhouse gas (GHG) emissions coming to the fore of nations’ climate policy concerns, the wine industry faces a new challenge. Viniculture (grape cultivation for winemaking) is directly susceptible to climate change impacts due to grapevines being highly sensitive to the surrounding environment, such as changes in weather patterns. In addition, the industry is increasingly targeted by climate change response measures, aimed at reducing GHG emissions. Such measures are poised to significantly alter traditional methods of production. Trade-related climate change response measures, such as shifts in import-export patterns, border carbon adjustments or non-tariff barriers (such as standards), are also increasingly more prevalent.

South Africa is the world’s sixth largest exporter of wine in volume and has not been exempt from these trade impacts. This paper unpacks the green protectionism dynamics which have increasingly impacted the domestic wine value chain and stand to be a growing risk moving forward. The paper also explores the factors that make it particularly difficult and yet necessary for South African producers to adapt to this new genus of regulation.

This report was produced by TIPS for the Department of Trade, Industry and Competition

WIDER Working Paper 2019/70

This working paper, Assessment of demand in agro-processing machinery in the SADC region: A case study of the maize-milling machinery value chain in South Africa and Zambia, forms part of the project: Southern Africa – Towards Inclusive Economic Development (SA-TIED)

Abstract

The SADC Industrialization Strategy and Roadmap 2015–2063 aims to arrest deindustrialization and resuscitate manufacturing capabilities within the region. Agro-processing, the largest contributor to manufacturing in most of the member states, has been chosen as one of the growth paths to help the region reindustrialize. Because of its backward linkages with the agricultural industry and forward linkages into the diverse food industry, this subsector has received immense government support and private sector investment. However, the region faces important leakages in imports of machinery. This paper investigates whether the sector is stimulating additional manufacturing capabilities in agro-processing machinery, equipment, and parts, and whether these could drive capabilities, factor accumulation, and technological capabilitybuilding to capture the full value envisioned in the Roadmap.

Download Working Paper: https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp-2019-70.pdf

TIPS acknowledges the support of the SA-TIED programme for this working paper, with special thanks to UNU-WIDER and the South African Department of Trade and Industry.

WIDER Working Paper 2019/38

This working paper, Moving up the copper value chain in Southern Africa, forms part of the project: Southern Africa – Towards Inclusive Economic Development (SA-TIED)

Abstract

t: Interest in industrial hemp has revived in the past 20 years. Malawi is considering legalizing the cultivation of industrial hemp as an alternative cash crop to tobacco with great potential. This study considers the potential and challenges of creating an industrial hemp value chain between South Africa and Malawi, with Malawi concentrating on upstream cultivation and South Africa on downstream value-adding activity. The research supports a finding that industrial hemp offers strong opportunities as a niche market even if mainstream demand is slow to materialize or does not materialize at all. It also shows that undertaking such an inter-regional endeavour would be considerably more complicated than initially envisaged, given the agricultural structure and operation of the Malawian economy and its smallholder farmers.

Download Working Paper: https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp-2019-52.pdf

TIPS acknowledges the support of the SA-TIED programme for this working paper, with special thanks to UNU-WIDER and the South African Department of Trade and Industry.

Session 7: Agricultural value chains and sustainability

Session 7: Agricultural value chains and sustainability

Session 9: Unpacking the water-energy-food nexus

Session 2: Mining in Support of Industrial Development 

Session 8: Minerals Beneficiation 

This working paper presents an analysis of the dominant and growing agri-food system in South Africa, focusing on power and governance as two key factors that critically influence system outcomes. Current approaches towards agricultural development (including food security) tend to under-theorise these issues and thus they may not receive the necessary attention from policymakers.