South Africa Eyes Biofuels Expansion To Boost Employment And Agricultural Stability

Source: Wolfgang Weiser via Pexels

Delivering the Department of Agriculture’s 2026/27 Budget Vote speech, Minister of Agriculture John Steenhuisen said biofuels remain one of the few policy tools capable of linking agriculture, energy and industrial development.

“Biofuels are not simply an energy intervention. They represent one of the few policy levers that simultaneously drive rural employment, agro-processing, and industrial development,” he said.

25,000 jobs linked to blending target

According to Steenhuisen, a 2% biofuels blending target could create around 25,000 jobs, particularly in rural areas.

“A 2% blending target has the potential to create approximately 25,000 jobs, largely in rural areas, while a single commercial ethanol facility can anchor thousands of jobs across the agricultural value chain,” he said.

Government said biofuels could also help stabilise grain and sugar markets facing pricing pressure and oversupply challenges.

“For grain farmers facing low prices, high stockpiles, and constrained export markets, biofuels introduce a structural demand mechanism that can absorb surplus production and stabilise prices,” said Steenhuisen.

He added that ethanol production could create an alternative market for South Africa’s sugar industry.

“For the sugar industry, which continues to face pressure from declining consumption and global competition, ethanol provides a parallel market that can sustain production and protect livelihoods.”

Government seeks regulatory certainty

Steenhuisen said South Africa could draw lessons from countries such as Brazil and India, where biofuels industries have evolved through flexible production systems and phased policy implementation.

“The success of a biofuels industry does not lie in ignoring food security concerns, but in managing them intelligently,” he said.

He added that government’s focus would be on reducing regulatory uncertainty and creating conditions that encourage investment across the value chain.

“Our task is to remove the blockages that have delayed investment, to create certainty in the regulatory framework, and to ensure that the benefits of biofuels are felt across the agricultural economy.”