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Transport accounts for about one quarter of South Africa's final energy consumption. Most of the energy used is based on fossil fuels causing significant environmental burdens. This threat becomes even more dominant as a significant growth in transport demand is forecasted, especially in South Africa's economic hub, Gauteng province. The South African government has realized the potential of biofuel usage for reducing oil import dependency and greenhouse gas ( GHG) and has hence developed a National Biofuels Industrial Strategy to enforce their use. However, there is limited experience in the country in commercial biofuel production and some of the proposed crops (i.e. rapeseed and sugar beet) have not been yet cultivated on a larger scale. Furthermore, there is only limited research available, looking at the feasibility of commercial scale biofuel production or abatement costs of GHG emissions. To assess the opportunities of biofuel production in South Africa, the production costs and consumer price levels of the fuels recommended by the national strategy are analysed in this article. Moreover, the lifecycle GHG emissions and mitigation costs are calculated compared to the calculated fossil fuel reference including coal to liquid ( CTL) and gas to liquid ( GTL) fuels. The results show that the cost for biofuel production in South Africa are currently significantly higher (between 30% and 80%) than for the reference fossil fuels. The lifecycle GHG emissions of biofuels (especially for sugar cane) are considerably lower (up to 45%) than the reference fossil GHG emissions. The resulting GHG abatement costs are between 1000 and 2500 ZAR2007 per saved ton of carbon dioxide equivalent, which is high compared to the current European CO2 market prices of ca. 143 ZAR2007 t−1. The analysis has shown that biofuel production and utilization in South Africa offers a significant GHG-mitigation potential but at relatively high cost. [ABSTRACT FROM AUTHOR]