Rules may ease to spur ethanol exports

The move follows Pichai’s meeting last week with about 10 ethanol producers, when they said they wanted to increase exports as domestic demand was in decline.
Domestic demand is now 1 million litres a day, against the previous level of 1.2 million to 1.3 litres. Meanwhile, the total supply side is 5 million litres of ethanol capacity per day.
The excess supply could be diverted to export, but this avenue is still limited due to rules and regulations governing overseas sales of the fuel.
However, the Energy Ministry insists that it will also continue promoting alternative-energy consumption. It expects that a wider gap between the retail prices of 91-octane petrol and gasohol will return when oil traders’ contributions to the Oil Fund resume in January.
Ethanol is a key raw material in the production of gasohol.
Pichai said the ministry could still go ahead and discontinue 91-octane sales, a matter for which a feasibility study is under way. If such a move were taken, he believes it would boost demand for ethanol to 2 million litres a day.
“The ethanol producers want the government to facilitate their exports,” said the minister.
Currently, the sale of domestically produced ethanol is limited to oil traders, and ethanol producers are not allowed to aggregate their output for exporting.
He added that as ethanol was produced from molasses, it would not impact on food output. Moreover, it is produced from cassava, which is essentially food for animals.
The ministry’s policy is to double the production of ethanol from cassava from 37,500 tonnes to 77,000 tonnes per month. Cassava prices have increased to Bt2.70 from Bt1 per kilogram since the campaign was announced, he said.
The ministry also hopes to promote ethanol produced from cassava by using compensation from the Oil Fund at Bt2 per litre or Bt300 million-400 million a year, he said, adding that he would propose this measure to the Energy Policy Administration Committee.
“The Energy Ministry will promote ethanol produced from cassava, and we expect this will kick off in January. Meanwhile, it will support ethanol produced from molasses for export. We will have to discuss with the Commerce Minister whether to use a pledging scheme like the rice programme for exports.
“We expect the working group, which was recently established to evaluate how large the subsidy should be, will complete the evaluation over the next few weeks,” he said.