Ethanol plans axed on low use

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Ethanol plans axed on low use

Oversupply makes business unviable

Published: 28/01/2009 at 12:00 AM
Newspaper section: Business

More than half of the 47 licensees for ethanol production are unlikely to get their production plans off the ground in light of a steep fall in oil prices, a senior Energy Ministry official said yesterday.

The government awarded 47 licences for a total daily capacity of 10 million litres of ethanol five years ago when the country first embarked seriously on alternative-fuel development.

However, oil prices have fallen to only US$43 a barrel currently from a peak of $147 in mid-July last year, offering almost no incentive to motorists to fill their tanks with gasohol, a mixture of ethanol and petrol.

According to Praphon Wongtharua, director of alternative fuels of the Department of Energy Development and Efficiency (DEDE), Thailand has a total production capacity of 1.57 million litres but the current utilisation rate is only 1.2 million litres a day, which in turn is nearly 300,000 litres more than the demand of 930,000 litres.

"Demand for ethanol will probably rise to 1.2 million litres a day by the end of this year," he said.

He said only 11 licensees were now producing ethanol, with a daily output of 1.2 million litres. Another two will be ready to start production with daily capacity of 400,000 litres. They are a joint venture between Thai Oil Plc and Mitr Phol and Padaeng Industry Plc in Mae Sot, and a subsidiary of KSL Plc in Ban Pong, Ratchaburi.

Another 300,000 litres a day will also come from a 70%-complete plant in Sa Kaew, a joint venture between ES Power and Taiping Co.

As a result, a surplus of approximately one million litres a day will be likely by the end of this year.

"So it is no surprise if other ethanol producers, whose plants have not yet been built, automatically abandon their licences on speculation of extremely poor business prospects," Mr Praphon said.

The Energy Ministry admitted that these ethanol licensees had not yet confirmed their operation plans with the DEDE.

"Given the projected huge surplus over the next several years and no definite date when mainstream petrol fuels will be phased out, the investments carry a very high risk," he said.

Mr Praphon also criticised the lack of infrastructure support such as trains, ethanol pipelines and depots.

"Compared to other ethanol exporters like Brazil, Thailand's industry has expensive logistics costs of around 25% to 30% of total costs, which is terribly high," he said.

Furthermore, this year Vietnam will likely have a capacity surplus, resulting in possible exports, and he sees it as another rival in international ethanol markets.

He hopes the Energy Ministry will maintain the policy of low retail prices of gasohol for as long as possible to encourage motorists to use the alternative fuel.

Currently, the spread between the premium petrol price and gasohol 95 is 13.30 baht a litre and 5.50 baht for regular petrol.

Sirivuthi Siamphakdee, chairman of the Thai Ethanol Manufacturers Association, also foresees a massive surplus of ethanol supply in the coming years. Yet he insists that the best solution is regulatory changes.

Among them is for the government to have separate laws for refined alcohol and liquor instead of using the same regulation as for liquor, which is very strict.

Mr Sirivuthi also agreed that demand would rise far more slowly than supply. Therefore, he projects no more than 20 out of the 47 licensees will go ahead with their production plans.

"The law change will help these producers because they can ship the excess ethanol output overseas more easily," he said.

"Thailand lost a chance to make money from our plentiful supply of biofuel over the past six months because of this unnecessary statute."

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Writer: YUTHANA PRAIWAN

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ming

Discussion 7 : 31/01/2009 at 09:34 AM7
plz change To Discussion 5 in the last post.
thanx
ming

Discussion 6 : 31/01/2009 at 09:30 AM6
To Discussion 1:
I don't know why you are so hate ethanol application.
i guess maybe you ever kill someone because of drinking too much E10?

let me tell you,

Around the world (Brazil,USA,CHINA)there are different reasons why the fue ethanol program was launched. take China for instance,China wanna consume the millions of tones of expired grain to avoid the high storage cost and just rot in the warehouse.

In Thailand, with the fact that cassava/sugar based raw material is quite a lot, it's good business to produce ethanol.

For responsible-taken mind, should think with future vision and national safety. if the oil price rise again. what you will do.

if everyone turn to Ethanol fuel in his car, the price maybe rise a little for sure, but it is under control much better than oil, because the raw material like cassava is easily provied by farmers. For oil, maybe need another thousands of years to wait for your body to get rotten.

so, wake up, and get cleear mind.
ethanol business is must for future.
Lertsiri Boonmee

Discussion 5 : 29/01/2009 at 02:14 PM5
So you think that by adding more alcohol into the fuel would be a great idea huh? Why not start to GIVE AWAY free engines that can run on this alcohol concoction and then you will see people satisfied...until that day comes, Pigs will still be able to fly on Cocaine...

The problem is not that Thailand doesn't want to use alternative fuels to save the planet or reduce costs for fuel importation...The problem resides in the fact that most people don't have the money to even buy a new car that is Ethanol ready in whatever mixture. So how will pushing for a fuel mix with ethanol going to help the situation when clearly, even the E20 people see a problem of worse fuel economy in the long run. Lets not forget that a basic fact that ETHANOL is CORROSIVE to cars that are less than 10 years old (some are only 4 years old and can't take Gasohol)

It was stupid to even launch and waste billions on advertising costs and development of E85. How many cars do you see on the road that can take E85 and owned by the normal working class? I bet you would have a better chance to see that senario when you see a Donkey drive by smoking weed in a TUK TUK than seeing normal blue collar workers driving by in VOLVOS that are tank full with E85.

As for the incentives.....normal people say so what with incentives to use Gasohol if it is the same corrosive matter that the world announced. Alright, to be fair Gasohol 95 octane (E10) may still be usable for cars on the road (not over 10 years at least) but it still is considered corrosive and without regular checkups and replacement parts for fuel lines and so forth, your car can actually turn into a spending spree at the local mechanic or even a coffin on wheels at the most unexpected moment during a ride home.

It took the world over 100 years to figure out the petrol engine and the maximize its power and efficiency. Now with the Ethanol craze, we all plan to just take a chance and fill'm up? Something is not right with the picture.

Did anyone ever stop to think that it takes more man power and money to produce Gasohol? Sure in the short run it is cheaper by a few baht than regular Benzene mixes, but I am sure after everyone converts to gasohol, the rug will be pulled from under their feet and prices will shoot up faster than an exploding fireworks in Zantika Pub. THINK PEOPLE THINK.....

A better solution is to actually legitimize and create a truely alternative fuel answer (for those that are eager to save the world) and not to rely on fossil fuels. Last I checked Gasohol still is based on Fossil fuels and the emissions are still plenty. Electric vehicles are another alternative fuel base but don't forget that not everyone or any country would want their backyard to be piled with expired or overused CORROSIVE Batteries as waste products from EV (Electric Vehicles)....Some people ask, then what about lithium batteries as a better solution to EVs...to which I reply, have you ever placed a used Lithium Battery in heat or direct sunlight and kiss your face goodbye from the explosion?

If the government wants to impose the use of gasohol then why are car manufactures still selling their current lineups? ISn't that like tricking people to buy something that is about to be discontinued? Sure it maybe E20 proof, but what happens when out of nowhere the Thai Government want to say "NO MORE E10 91 and E10 95...its now only E85 across the board....." Don't tell me I didn't tell you so...maybe they want us to also shell out another sum of money for a brand new car when that happens...whatever happend to living the simple life....oh if the world was a simpler place to live, then I wouldn't have to work far from home or travel at all...
Moo

Discussion 4 : 29/01/2009 at 10:59 AM4
Max (Discussion 1) you can't just increase the ethanol content in fuel. The cars have to be able to burn it with no detrimental effect. Cars built over the last 10 years generally can run on 95 Gasohol(E10) fine. However they can't run on E20 or E85, to run on these you need flexfuel engines (btw the reason the engine needs to be capable to run gasohol is simply because ethanol is more corrosive than petrol and eventually wears away the fuel lines and seals making for a costly repair).
max meier

Discussion 3 : 29/01/2009 at 01:27 AM3
i can not agree with this poster from before, last week I went from phuket to chiang mai with the car. every petrol station I went on the way had gasohol. what most didnt have was 91 gasohol, but all had 95 gasohol. it simply takes some time to implement distribution thats all. In Brazil it took them over a decade to implement the ethanol stuff how can you think the Thai can do this in one year or less ?? please use your brain !!
Max

Discussion 2 : 28/01/2009 at 09:34 PM2
During a recent trip, I stopped at at least five PTT stations searching for E-20 with no success. Finding E-20 would have consumed ten percent more ethanol rather than the extra ten percent gasoline. I have heard similar complaints from other drivers who are able to use E-20 fuel.
max meier

Discussion 1 : 28/01/2009 at 02:49 PM1
what is written in this article is quite nonsense, most people including mysel fill the tank with gasohol, thats simply the cheapest suitable petrol and with one tank fill its possible -also now- to save about Baht 100,- compared to the other petrol. The best would be to make gasohol 1 or 2 Baht cheaper, put more ethanol into it and immediately Thailand would need much less to pay for imported oil. On top of it increasing the ethanol production will create lots of jobs in THAILAND. I would really suggest to this people in Bangkok to start using their brain, what are they getting paid for ?

Ethanol plans axed on low use