Biofuels in Thailand - statistics & facts
Thailand’s capital city is notorious for its traffic and it is no surprise that the country is one of the largest producers of greenhouse gases from transportation. For this reason, biofuels emerge as a solution for its high dependency on fossil fuels. These fuels are made of organic materials such as crude palm oil, sugarcane, and cassava. The Thai government is encouraging the use of biofuels to lower emissions from automobiles by providing incentives, including discounts at gas stations and reduced excise taxes on vehicles that operate on gasoline mixes containing ethanol. Therefore, gasohol (a mixture of gasoline and ethanol) and biodiesel (a mixture of diesel and methyl ester generated from palm oil) are the most widely used biofuels in transportation and the agricultural sector in the country.
Thailand's shift to biofuels will be successful only if it can overcome said obstacles. It also has to resolve regulatory confusion on the various blend rates that impact long-term investment and market competition from electric vehicles (EVs).
Thailand's biofuel framework for a greener energy future
Thailand’s updated National Energy Plan (2024–2037) emphasizes the role of biofuels in the country’s transition to greener energy. The plan seeks to reduce carbon dioxide emissions in Thailand by promoting gasohol, biodiesel, and sustainable aviation fuel (SAF). However, the plan acknowledges the need to adapt to market conditions and practical restrictions by reducing the on-road biofuel use target. The State Oil Fund Act of 2019 was a major development that resulted in the reduction of price subsidies for biodiesel and gasoline. As part of this policy shift, the annual average price of E85 and B20 increased significantly since 2020. Making E85 and B20 more expensive pushed gas stations to promote more commonly used biofuel blends like E20 gasohol and B7 biodiesel. This reduction in subsidies helped control the financial liabilities of the State Oil Fund while encouraging more sustainable fuel choices. Furthermore, Thailand aims to reduce dependency on imported fossil fuels by promoting domestically produced biofuels, such as Gasohol E20 and B7 biodiesel.Path to a sustainable biofuel future
The availability of domestic feedstocks, however, is a major factor in this strategy's effectiveness. Because Thailand's biofuel industry depends on crops like sugarcane, cassava, and palm oil, which are impacted by weather-related changes that affect yields and production, the industry faces difficulties in securing a consistent supply of feedstock. Meeting biofuel ambitions requires increasing crop yields and acreage and investing in technology to improve productivity and resilience.Thailand's shift to biofuels will be successful only if it can overcome said obstacles. It also has to resolve regulatory confusion on the various blend rates that impact long-term investment and market competition from electric vehicles (EVs).
