Opportunity to Establish a Sustainable Aviation fuel (SAF) Plant in the EEC Area
Each year, The aviation industry accounts for about 2% of global carbon dioxide emissions. Therefore, the global aviation industry needs to accelerate its actions towards the goal of Net Zero by 2050.
One of the key tools that airlines are starting to use is Sustainable Aviation Fuel (SAF), which is produced from renewable raw materials such as used cooking oil, molasses, etc.
For Thailand, the opportunity to invest in SAF is clearer because the government has included SAF in the (draft). The Renewable and Alternative Energy Development Plan 2024-2037 (AEDP2024) aims to mix SAF at 1% of all aviation fuels in 2026 and will increase to 8% in 2036 onwards. If the government and the private sector work together to support Thai airlines to use SAF at a rate of 8% in 2037, it will reduce carbon dioxide emissions by up to 2.3 million tons per year, or about 11% of carbon dioxide emissions in Thailand’s air transport sector.
In addition, Krungthai COMPASS believes that Thailand has the potential to become a SAF production center in the ASEAN region, especially in the EEC area, because it has infrastructure such as 5 oil refineries in the EEC area with a total production capacity of 1.1 million barrels/day, or about 90% of the country’s production capacity. As a result, the demand for SAF of airlines is likely to increase, coupled with the location of the EEC, which has the advantage of transportation linked to ASEAN. Therefore, used cooking oil can be imported from ASEAN through Laem Chabang Port and the Thai-Cambodian border, which will reduce the shortage of raw materials for SAF production, as well as create opportunities for SAF exports through Laem Chabang Port in the long run.
However, investment in establishing SAF production plants in the EEC area requires cooperation throughout the ecosystem. Entrepreneurs in the biofuel industry should collaborate with farmers, households, and entrepreneurs in the food and hotel industry to collect used cooking oil and agricultural waste. Meanwhile, the government should issue concrete measures to promote investment and use of SAF, such as exemption from import tax on machinery for SAF production, tax rate reduction measures for airlines that choose to use SAF, etc., which will contribute to supporting Thailand to achieve the goal of carbon neutrality by 2050.