Thailand promotes sugarcane ethanol production in cadmium-contaminated area that is off-limits for food crops

January 31, 2008

In Thailand, the Agriculture and Cooperatives Ministry is promoting sugarcane production for ethanol in a the cadmium-contaminated Mae Sot district of Tak, where food crops have been banned for health safety reasons. The Mae Sot Clean Energy plant, a joint venture between Padaeng Industry, Thai Oil and Petrogreen, will be completed in 2008 to produce sugarcane ethanol in the district.

Earlier this month, Thai Energy Minister Piyasvasti Amranand said that biofuels sales would increase in 2008 to $469 million from $157 million in 2007. He said that the cost of oil imports have fallen 10% as a result of biofuel usage and a stronger currency, adding that gasoline would be replaced by E10 and E20 blends by 2012.

Thai biofuel demand has increased more than 100 percent for 2007; the spur in biofuels sales comes not only from the introduction on E20, but also the implementation of a B2 mandate. Demand is so brisk that major oil traders may be required to establish mandatory strategic reserves of ethanol and biodiesel in addition to conventional fossil fuels.

Biofuel distributor Bangchak said that it had voluntarily set up a reserve of 790,000 gallons of ethanol and 378,000 gallons of biodiesel.

To coordinate these disparate developments, last week the Thai government announced the establishment of a new, national biofuels organization, which will include members of the government, industry, and private citizens. The Energy Ministry began coordination talks with the Commerce and Agriculture ministries, as well as representatives of universities, farmers, car makers and oil retailers. A 21-member panel will supervise policy while a 13-member panel will supervise management of biofuels development from field to wheels. $3 million in palm oil taxes will be used to support the committees.