Ethanol-trading plan for Thailand under study
The Energy Ministry has hired the Petroleum Institute of Thailand to study the country's potential to become a hub for ethanol trading in Southeast Asia and to discuss with the Excise Department the revision of existing laws related to exports of ethanol.
The institute's deputy director Reungsak Thitiratsakul said the Department of Alternative Energy Development and Efficiency (DEDE) had hired the institute to prepare the feasibility study, which is expected to be complete within a year.
He said Thailand was producing an excess of ethanol and biodiesel. The country is able to produce 6 million litres of biodiesel per day, but is currently consuming only 1.6 million litres per day. Production of ethanol is currently 2.05 million litres per day, which exceeds the country's needs of only 1.4 million litres per day.
Next year, five new ethanol plants will be on-stream, adding to the existing 19 plants already in production. This new capacity will increase Thailand's ethanol production to 5.35 million litres per day, and all of the excess can be exported, Reungsak said.
The existing 19 plants are not operating at full capacity because demand for ethanol in Thailand is still limited. At full capacity, they are capable of producing more than 3 million litres of ethanol per day. As well, 47 entrepreneurs have applied for new licences to produce ethanol, and if these plants are built, then Thailand's ethanol production could reach 12.5 million litres per day.
However, Reungsak said a way had to be found to reduce the cost of ethanol to US$20 per barrel below the current world price for crude oil, which was $127 per barrel. If this can be achieved, then Thailand is well on its way to becoming a sustainable ethanol exporter.
Reungsak said the institute also had to find solutions to revising existing laws related to exporting ethanol.
The Excise Department's current law is a significant obstacle to Thailand becoming an ethanol export hub. The law prohibits small ethanol traders from combining their production for export. However, to be competitive, ethanol must be bulk-shipped in large quantities up to thousands of tons, so small traders must be allowed to combine their products.
An Energy Ministry source said the Office of Energy Policy and Planning had also hired a company called Berra Ltd to study the reference price of ethanol in Thailand.
The reference price is usually Bt1 to Bt2 per litre higher than the market price, so ethanol traders are unable to use the reference price.
