Biofuel for aircraft, known as sustainable aviation fuel (SAF), is expected to become popular in the industry once the product debuts next year, says SET-listed energy conglomerate Bangchak Corporation, which has diversified into the SAF business.
Many companies are keen to buy SAF because of growing concerns about the impact of conventional jet fuel on the environment, said Chaiwat Kovavisarach, group chief executive of Bangchak.
"We received a very warm welcome from prospective SAF buyers," he said.
The company is building a 10-billion-baht SAF production facility adjacent to its oil refinery in Bangkok's Phra Khanong district.
Construction of Thailand's first SAF production plant is expected to be completed before the end of 2024.
The factory, with a production capacity of 1 million litres a day, is scheduled to commence commercial operations between the end of 2024 and early 2025.
When Bangchak's SAF manufacturing initiative became known, some companies said they would like to buy "every drop of SAF", said Mr Chaiwat, which led the company to carefully plan for SAF distribution.
He did not name the eager companies, but indicated purchase agreements are expected to be completed in December this year.
The company is planning to conduct a feasibility study on expansion of the SAF production capacity to serve the huge demand.
The SAF business is one of Bangchak's various environmental, social and governance projects, which are expected to help the company achieve carbon neutrality, a balance between carbon dioxide emissions and absorption, by 2030.
SAF can replace jet fuel because their properties are similar, while the former has a smaller carbon footprint.
This type of biofuel, which can be made from used cooking oil and agricultural waste, produces up to 80% less greenhouse gas emissions than conventional jet fuel, according to media reports citing various forecasts.
If SAF is used in the Thai aviation business, carbon dioxide emissions from the industry could be cut by 80,000 tonnes a year, said Mr Chaiwat.
The SAF factory is expected to be operated by BSGF Co, a joint venture between Bangchak, BBGI, the company's biotechnology arm, and Thanachok Oil Light Co, which runs an integrated vegetable oil business.
He said earlier Bangchak will use used cooking oil as a feedstock for producing SAF under a campaign dubbed "Fry to Fly", or tod mai ting in Thai.
This campaign not only helps to ensure the company has a sufficient supply of raw materials, but will also encourage the public to refrain from polluting the environment through improper disposal of used cooking oil or by repeatedly reusing it, said Mr Chaiwat.
Under the campaign, people can sell their used cooking oil to the company for 13 baht per kilogramme at 44 Bangchak service stations.