Renewable fuels derived from crops such as maize, sorghum, and sugar cane hold the potential to help reshape South Africa’s energy industry. Against the backdrop of ongoing geopolitical tensions in the Middle East – which have contributed to uncertainty in global trade, higher oil prices, and disruptions in fertiliser markets – biofuels rank high on political, agricultural, and societal agendas.
At Nampo 2026, during a Nation in Conversation session, the panel discussed the challenges and opportunities in the biofuels industry.
The panel comprised Minister of Agriculture John Steenhuisen; Prof Ferdi Meyer, managing director of the Bureau for Food and Agricultural Policy and an extraordinary professor in agricultural economics at Stellenbosch University; Peter Starling, executive chairperson of AlcoNCP; and Derek Mathews, former chairperson of Grain SA and a farmer in Lichtenburg, North West.
The session, which took place on 13 May, was facilitated by Theo Vorster, investment strategist and CEO of Galileo Capital.
Positioned as a solution for energy security, rural development, and meeting climate commitments, the opportunities for developing this industry appear compelling. The panel deliberated biofuels as a viable alternative to fossil fuels.
Market realities and farmer capacity
According to Steenhuisen, biofuels are not merely a technological solution but represent a profound shift towards energy independence, ecological balance, and social resilience.
Some of the questions the panel addressed were:
- Are biofuels a viable option in South Africa, particularly at farm level?
- Are current investments aligned with the realities of the country’s agriculture sector?
- What will happen when oil prices drop and maize prices rise?
- How can government, industry, and agriculture work together to unlock the full potential of biofuels?
The discussion also reinforced the strategic importance of biofuels as part of South Africa’s future agricultural growth trajectory and the societal responsibility of pursuing more sustainable and affordable energy options.
According to Mathews, the development of a biofuel industry could be a game-changer for South Africa, offering farmers an important lifeline. However, he warned that all scenarios regarding oil and maize prices must be considered.
A fuel-versus-food debate has long centred on concerns around food security and has been a key factor limiting the development of the biofuel industry in the country. Nonetheless, Mathews emphasised that most grain farmers in South Africa are able to meet demand.
“If the demand is there, our farmers will be able to produce. The question is not whether farmers can produce but whether that demand will remain sustainable. Agriculture will fill the gap if the demand is created. We just need a reason to plant,” he said.
Meyer agreed, saying that over the past 20 years, South African farmers have shown they can adapt.
“Maize productivity at farm level improved with the adoption of technology. Maize yields are increasing annually by 2% to 5%. At the same time, hectares are being taken out of production as yields per hectare increase. There is land available for expansion,” he said.
Regarding price mechanisms, Meyer added that when the industry creates the pull, the market will sort out the finer details.
Policy direction and industry momentum
A 2022 World Wide Fund for Nature South Africa report indicates that the country has the immediate technical potential to produce 3,2 billion litres of sustainable aviation fuel (SAF) annually, following the strictest sustainability requirements.
It also notes that introducing green hydrogen into the SAF manufacturing process could extend this potential to 4,5 billion litres per year.
Steenhuisen noted that there is no reason to reinvent the wheel: “If we look at our BRICS counterparts, we are behind in this regard and we need to move forward. But I am glad to say there is a refreshed impetus on biofuels and efforts to unlock the various options. We are evaluating the 2014 paper and will present our findings to Cabinet. I believe we need to use the current crisis.”
He added that the South African sugar industry is also at a crossroads and is urgently looking to diversify into biofuels and sustainable materials to leverage international markets and withstand years of headwinds.
In 2020, the country established the Biofuels Regulatory Framework (BRF) aimed at tackling five particular aspects: the feedstock protocol, the mandatory blending regulations, the cost recovery mechanism for the blending of biofuels, the biofuels subsidy mechanism, and the selection criteria for projects requiring a subsidy.
Additionally, the BRF mandate aims to blend 2% biofuels with conventional petrol by 2030, a move that could inject fresh credibility into the industry.
The Department of Energy has also introduced incentives and subsidies to lower barriers for biofuel producers, making it easier for start-ups and established corporations alike to turn ideas into fuel.
Starling said the focus should shift from the agriculture sector to the fuel industry, as he believes farmers already have the ability to produce.
“The focus must be more on the fuel industry. Companies must be incentivised to take up the grain. This is the only way for all parties to remain profitable and sustainable,” he explained.
Grain markets, industry response, and long-term outlook
In a press release, Richard Krige, chairperson of Grain SA, said the organisation believes biofuels can play an important role in supporting additional domestic grain utilisation, strengthening market diversification, and improving long-term producer viability, while contributing to broader industrial development and energy objectives.
“Biofuels should be viewed as part of a broader market-development strategy that includes food, feed, fuel, and industrial uses. South Africa must continue exploring practical opportunities that create sustainable new demand for grain production,” he said.
Steenhuisen added that by replacing traditional petrol and diesel, biofuels can help reduce dependence and expenditure on oil imports and strengthen energy security within the country.
He said the adoption of biofuels also supports rural economies by creating jobs in agriculture and biofuel production, which are often overlooked in mainstream discussions.
