Petro SA could be the game-changer in the emerging industrial cannabis sector. The state-owned entity has included hemp in its biofuels strategy and is likely to be in the market for mega-offtakes.
The extent of Petro SA’s commitment to becoming a major player in the industrial hemp arena emerged at a webinar on market access, hosted by the Gauteng Agriculture and Rural Development Department on Friday 27 September 2025.
Petro SA Hopes to be Buying Hemp by 2028
Petro SA’s Biofuels Manager, Dr Nonyameko Sincadu told the 250 or so webinar participants that the corporation hoped to be buying hemp oil and biomass for biofuels by 2028.
She said there was already internal discussion on structuring appropriate offtake agreements for hemp permit holders, the main challenges being pricing and scale.
“We are looking at offtakes to enable farmers to plan their planting and for biomass to be received at our facilities and we are working on it with different entities within the group”.
High Demand Could Make Petro SA The Game-Changer
“Although the information on hemp is still limited, we are looking at this as a game-changer” said Dr Sincadu, who said Petro SA had all the elements in place to accommodate hemp as it was already sourcing sugarcane and sorghum for biofuels.
“We are looking at big volumes” she said. Petro SA imported 27 billion litres of biofuel in 2024 and it planned to source between four and five percent of that from local producers in the future.
“Energy is the heartbeat of everything that happens in the economy” said Dr Sincadu. “The world is moving towards green energy and developing farmers should be part of that. We are taking this seriously”.
She said hemp fitted into South Africa’s biofuel strategy because it met the requirements of renewable fuels (delivering 3,5 tons of biomass/ha), job creation (25 000 jobs per 100 000 ha of hemp) and soil remediation.
Highest Value in Hemp Seed Oil and Fibre
Petro SA provided a number of opportunities for the hemp industry, primarily in demand for biofuel feedstock, or more specifically:
· hemp seed for oil for biodiesel and seedcake for solid oils, ;
· hemp straw for fibre and fermentation into ethanol, syngas and biochar ;
· hemp dust for solid fuels
Most of the value is in hemp seed oil and fibre.
Petro SA Still Working on the Model
During the webinar, hemp industry veteran Dr Thandeka Khumalo, asked whether Petro SA would be funding small-scale growers. She said this was the sector that needed the most support from government cannabis initiatives and wondered how Petro SA could accommodate them.
Dr Sincadu said this was a challenge and the issue was finding the right aggregation model. In other words, Petro SA needs an intermediary between itself and the thousands of prospective hemp farmers who want to supply it.
She said that part of Petro SA’s move into the hemp space was looking at potential funding via the Biofuels Farmers Support Fund which is administered by the Central Energy Fund, the financing arm of the recently restructured and renamed Department of Minerals and Petroleum Resources (DMPR).
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