Namibia: Hydrogen, Minerals and the European Market

In 2022 Namibia signed the European Union's first African strategic partnership on raw materials and renewable hydrogen. The country also has the most advanced large-scale hydrogen project in Africa. The Hyphen project near Lüderitz is planned in two phases, with about 8 gigawatts of renewable power and 3 gigawatts of electrolysers in total. It aims for a final investment decision by the end of 2027, one million tonnes of green ammonia a year in the early 2030s and two million before the mid-2030s. The ammonia is to be shipped to Rotterdam, Hamburg and Wilhelmshaven. Besides hydrogen, Namibia has lithium, rare earths and the HyIron project for direct reduced iron.

In 2025 a large European utility withdrew from its planned offtake. Since then, Namibia has talked with more buyers in the EU, Japan and the Gulf. Every producer in the programme needs committed European buyers to get bank finance. These buyers sign contracts with companies in Europe.

The EU rules on critical raw materials

The Critical Raw Materials Act entered into force on 23 May 2024. Under this act, the EU has targets for 2030. By then, ten percent of the EU's yearly use of strategic raw materials should be extracted in the EU. Forty percent should be processed in the EU and twenty-five percent should come from recycling. At most sixty-five percent of each strategic raw material should come from a single country outside the EU. Projects outside the EU can also get Strategic Project status. Such a project gets advice on funding and attention from the EU financing hub, which brings together EU funds and the European Investment Bank. Its buyers, called off-takers, get more certainty. The Commission names off-take agreements with European companies that use these materials as one way to secure supply.

A European company signs these agreements. A Dutch entity can be that company. It signs contracts with European industry and can use European trade finance. It can also be the importer and use the Article 23 licence. With this licence, the import VAT is declared in the periodic VAT return. You can read more in the guide to a European entity for critical raw materials.

Hydrogen under the EU carbon border rules (CBAM)

Hydrogen is one of the six CBAM sectors. It falls outside the 50-tonne threshold, so the obligation applies from the first shipment, whatever the volume. When green ammonia and iron products made with hydrogen are imported through European ports, an authorised CBAM declarant established in the EU must declare them. For these goods the 50-tonne threshold applies: an importer is exempt if its yearly imports of fertilisers, iron, steel, aluminium and cement together stay at or below 50 tonnes. A producer can take on that role itself through its own Dutch BV. The BV then imports in its own name and presents the verified near-zero carbon figures directly. The producer keeps the higher price for low-carbon goods. You can read more in the guide to an EU entity for CBAM.

For minerals, the European company signs the off-take contracts, arranges European finance and earns the trading margin, as with other critical raw materials. HyIron's direct reduced iron falls under the iron and steel sector of CBAM. Namibia is one of the few countries where both sets of rules apply at once.

Structure and tax

Rotterdam is the logical port for ammonia imports. Tank storage and industrial buyers are close to the port. A Dutch entity can import through Rotterdam and use the Article 23 licence. European lenders and development banks know and accept Dutch companies. Before the notary drafts the deed, we check the ownership chain and the tax treaty position of each structure.

Setting up in the Netherlands

The Dutch BV is set up by notarial deed and registered with the Dutch Chamber of Commerce (KVK). Your group owns the shares. You sign a power of attorney, so the incorporation can be done from abroad. The BV then takes on the roles your plan needs: off-take counterparty, trading company, joint venture company or importer of record.

Banks look closely at commodity trade from this region. We start the talks with the bank at the same time as the incorporation. You can read more about a commodity trading entity and joint venture structures.

Frequently asked questions

Does CBAM apply to green hydrogen and ammonia from Namibia?

Yes. Hydrogen is one of the six CBAM sectors. It falls outside the 50-tonne de minimis threshold, so the obligation applies from the first shipment, whatever the volume. Ammonia counts as a fertiliser under CBAM. For fertilisers the 50-tonne threshold does apply: an importer is exempt if its yearly imports of fertilisers, iron, steel, aluminium and cement together stay at or below 50 tonnes. The company that imports with verified near-zero carbon figures gets a direct commercial advantage from them.

What is the Hyphen project?

The Hyphen project is Africa's most advanced large-scale green hydrogen project, near Lüderitz in southern Namibia. It plans about 8 GW of renewable power and 3 GW of electrolysers in total, built in two phases. The developer aims for a final investment decision by the end of 2027, one million tonnes of green ammonia a year in the early 2030s and two million before the mid-2030s. The ammonia is to be shipped to European ports, including Rotterdam.

Why do Namibian producers sign offtake contracts through a European company?

Banks finance a project when it has committed buyers. European buyers prefer to sign contracts with a company in Europe. A Dutch entity can sign the offtake contract, act as the CBAM declarant and receive the goods at the European port.

Does Namibia have an EU partnership?

Yes. Namibia signed the EU's first African strategic partnership on sustainable raw materials value chains and renewable hydrogen in 2022.