The interest in renewable resources has seen a focus on the production of biodiesel in South Africa as an alternative source of energy. While this sector show huge potential for economic growth, employment creation and the production of alternative energy, the sector is faced with many challenges. Looking at the case study of the Western Cape biodiesel plants, the paper discusses challenges   faced by the few emerging biodiesel producers.  The paper further highlights the positive impact of biodiesel production even at such small scale.  The paper argues that biodiesel production offers huge opportunities for the South African economy, suggesting that government should consider supporting local players in the sector to expand their businesses and to expand opportunities for economic growth.