B5 biodiesel will not replace B2 until 2011

B5 biodiesel will replace B2 in 2011 as scheduled, as the government needs enough time to ensure a sufficient supply of palm oil to produce the fuel, says Energy Minister Wannarat Channukul.

"The rumour that we would start the mandatory introduction of B5 one year early, causing a rise in crude palm oil prices, is groundless. We will move cautiously as planned," he said yesterday.

"We want to assure the public that when B5 is made mandatory we will have enough palm oil supply to feed demand from the both transport and food sectors."

From a total 5 million litres of crude palm oil (CPO) produced each day, the transport and food sectors consume 1.8 million and 3 million litres respectively.

Thailand currently needs 2 million litres of B100 biofuel (100% crude palm oil) per day to make B2, a blend of 2% CPO with diesel.

Demand will rise to 2.5 million litres per day when B5, with a 5% biofuel mix, is introduced. This would cause a daily CPO shortage of 500,000 litres at current supply capacity.

"If we force motorists to use B5 now, the CPO shortage will definitely happen. We need another 200,000 rai of palm plantations to extract enough CPO.