Thailand Could Benefit from Ethanol Imports

U.S. Department of Agriculture’s Foreign Agricultural Service (USDA FAS) has recently release a report that while Thailand has relied on domestic ethanol production, the country could benefit from importing ethanol and other biofuels by foreign countries.

While the country allows imports of ethanol for industrial use, the country does not import ethanol for use as a transportation fuel. Traders of ethanol in Thailand are required to receive a permit from the country’s Ministry of Energy; however, “to date, the MOE has never approved any imports of fuel ethanol due to sufficient supplies of locally produced ethanol,” the report says.

Distribution of ethanol within Thailand is restricted by the government to oil traders (as defined by the Fuel Trade Act) and the use of ethanol in other industries is still restricted since this requires the permission of the Liquor Distillery Organization, Excise Department.

Thailand has exported to the world markets since 2007 with the important markets such as the Philippines, Japan, and the United Kingdom. The export of ethanol also requires a special permit from the Director General of the Excise Department. Later, when the government ceased the sale of benzene 91 from January 1st, 2013, demand for ethanol rose substantially.

The authority responded by suspending ethanol export to ensure that there are sufficient supplies for the domestic market and, as a result, there have been no exports of ethanol since May 2013.

But the report says the country could benefit from allowing fuel ethanol imports. Feedstocks for domestic ethanol production in Thailand are sugar cane, molasses and cassava. Because of shortages of those feedstocks, Thailand “will be forced to temporarily lower biofuel use targets or price surges when weather-related feedstock shortages occur,” and the country’s lack of ethanol imports will prevent it from meeting higher ethanol-use targets.

It is also likely to see higher greenhouse gas emissions from land use change, the report said. “Permitting some role for imports unlocks the full positive potential contribution biofuels can make.”

And the country is set to lower its consumption goals for 2037. The report says a new 20-year Alternative Energy Development Plan was approved in April, and “the government is in the process of reviewing ethanol and biodiesel consumption targets.” Those targets are expected to be lower than the targets set out in the 2015 plan, due the concerns over feedstock supply. The new targets are expected to lower the consumption target in 2037 to 2.4 billion liters. That’s 41 percent below the target set out in 2015.

According to the report, the country’s ethanol and production rates are expected to increase in 2019, but not as quickly as they once had. In 2017, the country saw its highest ethanol consumption growth rate in 2017 at 12 percent. In 2019, ethanol consumption is expected to increase by 6 percent over 2018 levels. The reduced rate of ethanol production and use in the country, the report says, is “due to the delay in the cessation of Octane 91 E10 sales.” That cessation was scheduled for Jan. 1, 2018.

Despite the delay, the report says ethanol-blend levels in the country have reached 13.5 percent in this year as a result of strong E20 sales. But importing ethanol will lead Thailand to achieve domestic ethanol-use target plan.

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