The Thai Biodiesel Producer Association (TBPA) is calling on the government to reconsider its plan to further reduce the rate of palm oil-derived methyl ester blended in diesel to avoid a greater impact on the biodiesel industry, as capacity utilisation stands at only 30%.
Authorities plan to cut the proportion of methyl ester to less than 5%, but have yet to finalise the new level as part of efforts to relieve the financial burden of subsidising the diesel price as the prices of both diesel and methyl ester have increased.
Earlier blends of 7%, 10% and 20% methyl ester were aimed at promoting cleaner fuel, but the proportion was eventually reduced to 5% during the global oil price surge.
The 5% methyl ester and 95% diesel formula is known in the market as biodiesel "B5".
Higher energy prices caused transport operators to call for the reduction in methyl ester to reduce the price of diesel.
TBPA chairman Sanin Triyanond said some information with regard to a cheaper diesel price as the result of a reduction in methyl ester content was untrue.
The idea that a 1% cut in methyl ester content would reduce the retail price of diesel by almost three baht per litre is a "misunderstanding", he said.
A 1% reduction in methyl ester would only reduce the diesel price by 0.1-0.15 baht per litre, said Mr Sanin.
According to the TBPA, the methyl ester reduction has already decreased biodiesel consumption by 40% and led to a loss of between 50-60 million baht per day among biodiesel manufacturers.
The total output of methyl ester is currently 10 million litres a day.
The state policy to promote biodiesel, which started more than 10 years ago, generated 70 billion baht in economic value.