The agricultural sector could play an essential role in energy security by supplying feedstock to source fuel.
South Africa remains heavily dependent on imported refined petroleum products following the closure of major refineries including Sapref, Engen Refinery, and PetroSA, among others.
The Localisation Support Fund (LSF) said the country’s shift from a domestic refining base to a greater reliance on imported finished fuels has increased its exposure to international prices and geopolitical disruptions.
Middle East conflict pushes up Brent Crude oil
The country has experienced higher fuel prices and Brent Crude oil prices continue to surge due to the Middle East conflict, which has disrupted the world’s most critical oil transit chokepoint, Strait of Hormuz. This has fueled expectations of further increases in domestic fuel prices.
Since September 2, 95-grade petrol increased to R26.92 a litre, while wholesale diesel increased by at least R3.15 a litre.
Against this backdrop, sorghum and sugarcane are emerging as potentially viable feedstocks for local bioethanol industry, offering an opportunity to turn agricultural capacity into a domestic source of transport fuel.
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Sugarcane and Sorghum can produce local energy
Nanda Chanda, Novonesis South Africa country manager, said grain-sorghum ethanol plant could generate positive operating earnings before interest, tax, depreciation and amortisation (EBITDA), with additional value coming from by-products such as distillers dried grains with solubles (SSGS), an animal feed product, and captured carbon dioxide.
“Energy security is ultimately about resilience and resilience starts at home. South Africa has significant agricultural capacity and an opportunity to explore how biology can help can create more value from the resources already available to the country.
“The opportunity is not simply to produce biofuels, but to build a more resilient system connecting farmers, industry, energy, energy and the broader economy,” said Chanda.
He said a mandatory 10% ethanol blend could create domestic market approaching one billion litres of bioethanol a year. He said this would not eliminate South Africa’s exposure to crude oil prices but could introduce domestically produced component into the fuel mix while keeping more economic activity within the country.
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Chanda said South Africa has significant agricultural capacity and an opportunity to use biological solutions to extract more value from resources already available in the country.
The company estimates that South Africa produces 600 to 800 tonnes of cooking oil a day, which could provide a feedstock for biodiesel. Agricultural residues and organic waste could similarly be processed into biogas and other forms of renewable fuel.
- South Africa remains heavily dependent on imported refined petroleum products due to the closure of major refineries such as Sapref, Engen Refinery, and PetroSA.
- The Middle East conflict has caused Brent Crude oil prices to surge, disrupting the Strait of Hormuz and increasing domestic fuel prices in South Africa.
- Since September 2, 95-grade petrol increased to R26.92 per litre, and wholesale diesel rose by at least R3.15 per litre.
- Sorghum and sugarcane are emerging as viable feedstocks for local bioethanol production, potentially creating a domestic source of transport fuel.
- A mandatory 10% ethanol blend could create a domestic bioethanol market of about one billion litres annually, helping to introduce locally produced fuel components.
