The potential use of sorghum for bioethanol production in South Africa is once again on the agenda.
After nearly two decades of policy development, the gazetting of a regulated transfer price for bioethanol under the Petroleum Products Act (No. 120 of 1977) in August 2025 removed one of the regulatory barriers to a functioning domestic bioethanol market.
According to the Act, the transfer price is linked to the basic fuel price, ensuring bioethanol can be blended without increasing the retail price of petrol. This creates a new opportunity, but the question is whether government, industry, and the financial sector are ready to act with sufficient urgency to translate this framework into a functioning industry.
The renewed focus on using an agricultural crop for biofuel production follows the ongoing conflict in the Middle East, which is contributing to global fuel supply pressures and highlighting South Africa’s reliance on imported fuel.
The roundtable discussion, facilitated by Localisation Support Fund (LSF) CEO Irshaad Kathrada, examined various aspects of the broader value chain required to make this viable.
According to Kathrada, the LSF has commissioned a comprehensive research programme to assess the viability of establishing a sorghum-based bioethanol industry in South Africa.
The panel comprised Gjizelle Nel, chairperson of the Sorghum Cluster Initiative; Siganeko Magafela, head of industry logistics at the Fuels Industry Association of South Africa; Thabiso Manne, business development manager at the Industrial Development Corporation; Josie Rowe-Setz, CEO of BluePrint Holdings; Dr Marilyn Govender, head of diversification at the South African Farmers Development Association; and Markus Granlund, chief financial officer and chief operating officer at Mabele Fuels.
Bioethanol potential highlighted in sorghum study
During the discussions, the South African Sorghum Bioethanol Study, prepared by Blueprint Holdings, was presented by Josie Rowe-Setz, CEO of BluePrint Holdings.
She said grain sorghum bioethanol represents one of the most compelling localisation opportunities available to South Africa’s agriculture and energy sectors. According to her, the use of sorghum is strategically credible, technically proven, and closer to commercial viability than is commonly assumed.
Rowe-Setz further pointed out that South Africa imports virtually every litre of its fuel requirements: “South Africa has no crude oil reserves. Every litre of petrol begins as an import. This makes us vulnerable.
“South Africa’s fuel security has weakened as refinery capacity has declined and refined fuel imports have increased. Every litre of petrol and diesel now exposes the economy to global volatility. We are in a delicate situation. We need to do something as a country.”
The report showed that what makes the country even more vulnerable is the fact that it has produced very little commercial biofuel since 2007.
“South Africa has debated biofuels policy for almost two decades, and although the regulatory architecture largely exists, commercial production of biofuel does not,” Rowe-Setz added.
She outlined South Africa’s biofuel policy timeline as follows:
- 2007: the Biofuels Industrial Strategy sets the path for biofuel development and market creation.
- 2012: mandatory blending regulations for liquid biofuels are introduced in South Africa.
- 2020: a regulatory framework for biofuels is developed to support implementation and compliance.
- 2025: regulations gazetted again, providing legal certainty and enabling enforcement of the biofuel mandate.
According to Rowe-Setz, there is significant demand for biofuels in the country. “South Africa does not need to create a market for bioethanol; the market already exists in the current petrol pool and vehicle fleet. The country has a fleet of 7,8 million passenger vehicles. An enforced E2 blend mandate would immediately create an annual market for ethanol of approximately 181 million litres, which equals roughly R2,5 billion.”
During the panel discussions, it was reiterated that crude oil pricing will remain a key determinant in the viability of a bioethanol project in South Africa, underscoring the need for a long-term view of oil price trends.
Key concerns included the impact of oil prices, foreign exchange rates, and agricultural feedstock costs on the industry. As all three are highly volatile and unpredictable, managing the associated financial risks for investors will be challenging.
Why grain sorghum is suited to bioethanol production
Speaking about grain sorghum’s suitability for local bioethanol production, Kathrada said the crop, which is indigenous to Africa, has several key advantages:
- It is not a staple food in South Africa; therefore, its use as a bioethanol feedstock does not threaten food security in the country.
- It is a multiuse crop used for human consumption, animal feed, and (traditional) beer production. If fuel production is added, it could improve the financial sustainability of grain sorghum farmers.
- It is heat- and drought-resistant, underlining its reliability and sustainability as a bioethanol feedstock in the South African market.
- It can be cultivated under rain-fed conditions without additional irrigation, which enables the productive use of fallow land without exerting additional pressure on South Africa’s scarce water resources.
- It is capable of growing on more marginal lands, ensuring that areas with high agricultural potential remain available for other crops.
Sorghum expansion and food security considerations
Although sorghum is not considered as critical to food security as maize, concerns were raised that an attractive pricing mechanism for sorghum for fuel could shift land use from maize to sorghum, potentially affecting food security.
Responding to this, Nel pointed out that both commercial and small-scale farmers would be able to produce the crop.
“If the price is right and the sums make sense, farmers will plant sorghum. Production will follow a stable market. We need to create demand,” she added.
However, she noted that training and education would be required for new sorghum growers. “Education on best planting and harvesting times will be needed, as well as general crop management, but this is something that can be easily done.”
She also highlighted bird damage as one of the main production challenges. “Because we have very localised production areas, the losses suffered by farmers due to bird damage are quite severe. If we can increase the hectares, the damage could be diluted.”
Currently, sorghum is produced primarily in the Free State, Limpopo, and Mpumalanga.
Nel added that a multipronged approach could help revive South Africa’s sorghum industry, which is the focus of the Sorghum Cluster Initiative.
Research, policy support needed for biofuel growth
Commenting on the discussion, audience member Dr Shadrack Moephuli, director of the South African Sugarcane Research Institute (SASRI), said the Agricultural Research Council had conducted research and development into sorghum that yields more than the current traditional varieties.
“Similarly, SASRI has developed crop varieties suitable under various conditions for increased sugar yields. More importantly, a sustainable biofuel industry will require continuous research and development to enable innovation, crop improvement, and technology adaptation, as demonstrated by the Brazil and Colombia case studies. South Africa has institutions and expertise available to support an emerging biofuels industry,” he said.
Developing the biofuels industry could contribute significantly to job creation, energy security, infrastructure development, agriculture, and the green economy in South Africa, Kathrada stressed.
According to the Blueprint Holdings report, the following five priority areas are important for the future of the country’s biofuels industry:
- Active enforcement of the blending mandate with transparent monitoring and consequences for non-compliance;
Viability gap funding for first-mover grain sorghum ethanol plants;
• Blended finance facilities combining development finance institution capital with commercial lending;
• Contract farming schemes with guaranteed offtake linked to ethanol plant investment; and
• A national bioethanol carbon credit protocol.
Several supporting actions can begin immediately, including extending the VAT exemption that applies to other grains to sorghum, clarifying the use of downgraded maize as a biofuels feedstock, and investing in sorghum seed research and hybrid variety development.
