By Thomas Funke, CEO of SA Canegrowers
OPINION | AS the local sugar industry grapples with challenges like the global tariff disputes and an influx of cheap sugar imports, it is seeking to diversify into new markets for sugar cane – one of which could be the production of sustainable aviation fuel (SAF). This would be a lifeline for local sugarcane growers in KwaZulu-Natal and Mpumalanga.
SAF sits at the intersection of agriculture, energy, and aviation. They can accelerate the green transformation of the growing aviation industry. The industry has a net-zero carbon emissions target by 2050 through the use of SAF and other innovative technologies, so there is a double benefit of combatting the climate change that could be contributing to the erratic rainfall patterns, as well as providing this opportunity to diversify the sugar industry and protect the jobs and economic growth that the industry has built over so many years.
For South African sugarcane growers, SAF represents a commercially viable pathway to diversification, export growth, and industrial renewal. Sugarcane can be a good feedstock for many environmentally friendly fuels and can reduce CO2 emissions by up to 80% in comparison to conventional aviation fuel.
Figures from the International Air Transport Association (IATA) reported that total demand for passenger air travel was up 3.3% year on year in March this year but cautioned over tariffs and other “economic headwinds”. However, IATA has committed to using sustainable fuels to reach net-zero emissions by 2050 and estimates that SAF could contribute around 65% of reductions to reach that target. If South Africa moves swiftly, it could steer the sugarcane industry towards this lucrative new market, giving farmers stability and sustainability in an uncertain environment. But this pivot needs more than optimism, it needs a regulatory runway that allows SAF to take off.
The local sugar industry directly supports around 1 million livelihoods, including 24,000 small-scale and 1,200 commercial-scale growers across KwaZulu-Natal and Mpumalanga. But the industry needs to diversify as pressures mount from health legislation like the sugar tax and imported sugar undercutting local production. While the government has offered some relief through the Sugar Industry Value Chain Master Plan 2030, the sector needs more than short-term intervention and reliance on government subsidies.
SAF could be the answer. According to IATA, the demand for SAF could reach 450 billion litres per year by 2050. South Africa is uniquely positioned to capitalise on this opportunity as sugarcane is already recognised in the Biofuels Regulatory Framework (2020) as a strategic feedstock because it is grown in rainfed areas and will not place extra pressure on the country’s food security and water supply.
South Africa has the existing, established agricultural farmland, transport infrastructure, and industrial processing experience to succeed. What’s needed now is the right kind of investment to diversify the industry into finding these new uses for sugarcane. Policies need to encourage investment of billions of rands to set up systems that would take ethanol produced by sugarcane and turn it into aviation or blended fuel. Strong policies to provide the regulatory environment that encourages investment will also be helpful for the growth and job creation in the many support industries that South Africa desperately needs.
Currently, policy frameworks for SAF remain fragmented and underdeveloped. This is both a challenge and an opportunity. South Africa can proactively shape a regulatory environment that attracts capital and protects its local industry, and the livelihoods that depend on it.
SA Canegrowers is working with a variety of government stakeholders to establish a cohesive SAF strategy to innovate in this area.
The countries that move early on SAF policy will attract a larger share of global capital chasing green fuel opportunities, carbon tax credits and ESG-aligned investment which are benefits that conventional sugar exports cannot provide. There would be international demand for SAF from foreign airlines. The full value chain of SAF production from ethanol plants and refining facilities to storage, logistics, and quality testing offers broad economic spin-offs and job opportunities across various sectors such as agritech, transport, engineering, and energy. This is a long-term investment opportunity for the South African government to lead the way as a regional hub for air traffic to refuel with domestically produced SAF.
In a world where few industries offer predictable upside, sugar-based SAF may be one of the rare opportunities that turns climate and economic pressures into commercial growth. It can then not only protect the jobs in the sugar industry but also add a chance to upskill and work in various points along the sugar supply chain when turning raw sugarcane into ethanol for sustainable aviation fuels.
